CF Industries boosts bid for rival Terra to $4.6B, lifting cash portion; Terra evaluates offer

CF Industries sweetens takeover bid for Terra

DEERFIELD, Ill. — CF Industries Holdings Inc. has sweetened its hostile takeover offer for rival fertilizer maker Terra Industries Inc. by 12 percent to $4.6 billion, boosting the cash portion of its bid.

Terra, which has been fighting off CF’s buyout attempts since the start of the year, said Monday it expects to consider the revised proposal at a board meeting later in the week.

CF said it is offering to pay $36.75 in cash — including the $7.50 per share special dividend declared by Terra — plus 0.1034 of a CF common share for each Terra share. Its previous bid included $32 a share in cash.

The combined value of the new bid and the dividend is $45.91 for each Terra share.

Terra’s shares rose $2.98, or 7.6 percent, to $42.03 in morning trading.

CF’s overture is the latest development in a long-running effort which began when the company from Deerfield, Ill., made a $3.6 billion bid for Terra in January. The next month, Canada’s Agrium Inc. offered to buy CF in an effort to block its rival’s grab for Terra, which is based in Sioux City, Iowa. Agrium’s offer is conditioned on CF stopping its pursuit of Terra. CF has consistently turned down Agrium.

The industry’s drive for consolidation intensified at the start of the year when fertilizer company share prices had been beaten down. As the economy declined, struggling farmers scaled back demand for fertilizer, driving down prices that fertilizer companies charge as well as the price of their shares.

Share prices have since recovered with an improving outlook for the industry, but still remain far below last year’s levels.

CF shares fell 81 cents to $87.74 in morning trading Monday. Agrium’s U.S. shares rose $2.21, or 3.8 percent, to $59.77.