Mill physical education instructor Josh Wheeler examines a raise processed potash at the Mosaic Potash Colonsay cave storage trickery in Colonsay, Saskatchewan Sep 24, 2009.
Credit: Reuters/David Stobbe
NEW YORK (Reuters) - Fertilizer builder CF Industries Holdings Inc (CF.N) relaunched the antagonistic bid for Terra Industries Inc (TRA.N), betting that a higher cost of $4.75 billion would assistance it mangle up Terra"s programmed takeover by Yara International ASA (YAR.OL).
Ending the weeks-long silence, CF strongly criticized Terra"s programmed tie-up with Norway-based Yara, that was voiced about a month after CF called off the year-long bid to buy Terra in January.
"We do not assimilate how Terra could have entered in to an agreement with Yara but giving CF Industries an event to bid on a turn personification field," CF Chief Executive Stephen Wilson wrote to Terra CEO Michael Bennett.
Terra pronounced the house will examination CF"s ultimate offer, and the understanding with Yara could be canceled if it perceived a "superior proposal," giving allege notice to Yara -- if Yara did not compare the higher suggest inside of five commercial operation days.
Prices for manure and alternative rural line slipped during the recession, but are commencement to miscarry as farmers plant some-more crops and the universe race continues to grow. That"s put some-more vigour on manure companies to turn some-more efficient, together with gobbling each alternative up.
CF, that is now fighting off a antagonistic takeover try from Agrium Inc (AGU.TO), pronounced the suggest consists of $37.15 in money and 0.0953 CF share for each Terra share, or about $47.40, formed on Monday"s shutting prices.
The understanding would intermix the interest of stream CF shareholders and would emanate one of the continent"s largest producers of nitrogen, an necessary manure for farmers.
Yara has offering $41.10 per share, all in cash.
Yara would get a $123 million dissection cost if Terra walked away. Yara member declined to criticism Tuesday.
In midday trading, Terra shares were up $4.76, or 11.6 percent, to $45.96, whilst CF shares were down $4.03, or 3.8 percent, to $103.51. Yara shares fell 4.4 percent in Norway.
Even if CF"s shares went down from $107 to $95, the bid value would usually diminution by about $1 and CF"s suggest would still be some-more tasteful than the Yara bid, pronounced Broadpoint AmTech researcher Edlain Rodriguez.
"The approach the understanding is structured, the sensitivity in CF"s shares will not have a lot of stroke on the bid," he told Reuters.
YARA"S MOVE
Last month, Terra concluded to be paid for by Yara for $4.1 billion in an all-cash understanding that valued the association at $41.10 per share.
All eyes are on Yara now, with most on Wall Street wondering either the association will enlarge the own bid.
"Yara regularly pronounced they didn"t wish to get in to a behest war, and this is obviously going to be a behest war," Rodriguez said.
Low North American prices for healthy gas are piece of the reason Yara wants Terra. Natural gas is a vicious feedstock for fertilizer.
In midday Thursday trading, healthy gas prices hovered around $4.68 per thousand cubic feet. The cost had jumped on top of $10 only prior to the retrogression in 2008.
"Strategically, this is flattering critical to Yara," Dahlman Rose researcher Charles Neivert told Reuters. "Yara is perplexing to get some-more and some-more prolongation in to lower-priced gas regions."
However, CF pronounced it would be means to get about $75 million some-more in synergies from shopping Terra than Yara could.
CF additionally pronounced Terra is value $5 some-more per share to it than to Yara, since the synergies.
CF has cumulative $4.05 billion in financing commitments for the deal, together with $2.8 billion from Morgan Stanley Senior Funding Inc and $1.25 billion from Bank of Tokyo-Mitsubishi UFJ Ltd.
(Reporting by Matt Daily, Ernest Scheyder and Euan Rocha; Editing by Gerald E. McCormick and Dave Zimmerman)
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