Plans by Canadian fertilizer giant Agrium to take over U.S. rival CF Industries have run up against CF’s own plans for competitor Terra Industries.
CF on Friday succeeded in getting a slate of three pro-merger nominees elected to Iowa-based Terra’s board of directors. “We are pleased that Terra stockholders have voiced their support for CF Industries’ proposed acquisition of Terra by voting for all three of our director nominees,” CF CEO Stephen Wilson said in a release.
A CF/Terra merger is not necessarily a foregone conclusion as a result, but gives CF supporters three of eight seats on Terra’s board and will put pressure on Terra to enter talks with CF.
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CF’s Wilson said in the release that it’s now “time to move forward and put these two great companies together.”
Reuters news service writers Ernest Scheyder and Michael Erman noted in an article Friday that the vote will also add pressure on CF to wrap up a Terra deal quickly, as its financing through Morgan Stanley expires at the end of this month.
“CF’s really got their teeth in Terra now,” Ben Johnson, an analyst with investment research firm Morningstar, was quoted as saying in the Reuters article. “I don’t know if any more evasive maneuvers are going to be all that constructive.”
Reuters also quoted Edlain Rodriguez, an analyst with Connecticut-based equities research firm Broadpoint AmTech, as saying the Terra vote makes it harder for Calgary-based Agrium to succeed in its bid for CF. “That said, I don’t think Agrium is going to give up that easily.”
Agrium on Thursday announced it had tenders in hand for 62 per cent of CF’s stock to its own recently-sweetened bid, which CF’s board has rejected.
A successful takeover of Terra by CF would give CF control of Terra’s nitrogen fertilizer production facility at Courtright, Ont., near Sarnia.
It would also derail Agrium’s deal to sell a 50 per cent interest in its fertilizer plant at Carseland, Alta. to Terra. That deal is contingent on Agrium winning control of CF — whose Canadian assets include a nitrogen plant at Medicine Hat, Alta.
