Fully Financed Offer to be Scheduled to Close in 30 DaysOffer is Superior to Yara's Substantially Lower, Highly Conditional Offer
DEERFIELD, Ill., Mar 02, 2010 (BUSINESS WIRE) -- CF Industries Holdings, Inc.
(NYSE: CF) today announced that it has offered to acquire Terra Industries Inc.
(NYSE: TRA) for $37.15 in cash and 0.0953 of a share of CF Industries common
stock for each Terra share. The offer has a total value of $47.40 per share
based on CF Industries closing price on Monday, March 1, 2010. CF Industries has
received $4.05 billion of financing commitments and the offer is not subject to
financing. Morgan Stanley Senior Funding, Inc. has committed $2.8 billion and
The Bank of Tokyo-Mitsubishi UFJ, Ltd. has committed $1.25 billion. CF
Industries also announced that it intends to commence an exchange offer for
Terra shares that will be scheduled to expire on April 2, 2010.
"It is clear that CF Industries is the best acquirer for Terra given the
compelling strategic benefits of the combination, including the substantial
synergies only we can achieve together," said Stephen R. Wilson, chairman,
president and chief executive officer of CF Industries. "We withdrew our prior
offer because we believed that Terra was unwilling to agree to a sale. Now that
Terra is for sale, we have made an offer that is superior to Yara's
substantially lower, highly conditional offer."
The offer is subject to Terra terminating its merger agreement with Yara and
entering into a merger agreement with CF Industries and other customary
conditions set forth in the merger agreement.
The following letter was sent to the Terra Board of Directors:
March 2, 2010
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Board of Directors
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Terra Industries
Inc. |
Terra Centre
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600 Fourth Street
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P.O. Box 6000
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Sioux
City, Iowa 51102-6000 |
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Attention: |
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Henry R. Slack,
Chairman of the Board |
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Michael
L. Bennett, President and Chief Executive Officer |
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Dear Members of the Board:
CF Industries is offering to acquire Terra Industries for consideration per
Terra share of $37.15 in cash and 0.0953 of a share of CF Industries common
stock. Our offer has a value per Terra share of $47.40 based on CF Industries
closing price on Monday, March 1, 2010. The offer is not subject to financing.
We intend to commence an exchange offer and will be prepared to accept shares
for payment in 30 days.
We are sending a form of merger agreement to your advisors that would be
signed once you have terminated your agreement with Yara. Our offer is superior
to Yara's substantially lower, highly conditional offer.
As you acknowledged in your preliminary proxy statement, in early January we
requested that Terra provide additional information so that we could be in a
position to increase our offer. As you are aware, we were advised that no
information would be provided to us because "Terra is not for sale." Following
this response, we withdrew our offer, and we have not had any further
communication with you.
We do not understand how Terra could have entered into an agreement with Yara
without giving CF Industries an opportunity to bid on a level playing field. We
also do not understand how Terra could have accepted an offer from Yara with a
risk adjusted present value that we believe was not higher than the offer CF
Industries had made in December 2009. The value of any offer from Yara must be
discounted for the lengthy period to closing, as well as the risk that numerous
conditions beyond Terra's control will not be satisfied, including regulatory,
legislative and stockholder approvals.
We are more convinced than ever of the strategic benefits of this
transaction. This combination is clearly in the best interests of our respective
stockholders, employees and customers. We look forward to putting our two great
companies together.
Sincerely,
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Stephen R. Wilson
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Chairman,
President and Chief Executive Officer |
CF Industries
Holdings, Inc. |
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CF Industries has obtained a total of $4.05 billion of financing commitments
to fund the transaction, refinance debt and provide for a revolving credit
facility. Morgan Stanley Senior Funding, Inc. has committed $2.8 billion and The
Bank of Tokyo-Mitsubishi UFJ, Ltd. has committed $1.25 billion. CF Industries
anticipates that following the closing of the transaction, it will effect a
public offering of common stock in an amount equal to approximately $1 billion.
CF Industries expects the transaction to be significantly accretive to earnings,
both before and after such equity issuance.
Morgan Stanley and Rothschild are acting as financial advisors and Skadden,
Arps, Slate, Meagher & Flom LLP is acting as legal counsel to CF Industries.
About CF Industries
CF Industries Holdings, Inc., headquartered in Deerfield, Illinois, is the
holding company for the operations of CF Industries, Inc. CF Industries, Inc. is
a major producer and distributor of nitrogen and phosphate fertilizer products.
CF Industries operates world-scale nitrogen fertilizer plants in Donaldsonville,
Louisiana and Medicine Hat, Alberta, Canada; conducts phosphate mining and
manufacturing operations in Central Florida; and distributes fertilizer products
through a system of terminals, warehouses, and associated transportation
equipment located primarily in the Midwestern United States. The company also
owns a 50 percent interest in KEYTRADE AG, a global fertilizer trading
organization headquartered near Zurich, Switzerland. Additional information on
CF Industries is found on the company's website at http://www.cfindustries.com.
Additional Information
CF Industries Holdings, Inc. ("CF Industries") intends to file a Registration
Statement on Form S-4 and a Tender Offer Statement on Schedule TO (collectively
with a Letter of Transmittal and related documents, the "Exchange Offer
Documents") with the Securities and Exchange Commission (the "SEC") in
connection with the proposed offer (the "Exchange Offer") by Composite Merger
Corporation, an indirect wholly-owned subsidiary of CF Industries, to exchange
each issued and outstanding share of common stock of Terra Industries Inc.
("Terra") for $37.15 in cash and 0.0953 shares of CF Industries' common stock.
The Exchange Offer has not yet commenced. This press release is for
informational purposes only and does not constitute an offer to exchange, or a
solicitation of an offer to exchange, shares of Terra common stock, nor is it a
substitute for the Exchange Offer Documents. The Offer will be made only through
the Exchange Offer Documents.
In addition, CF Industries has filed a registration statement (including a
base prospectus) for the public offering of securities to which this
communication relates. Before you invest, you should read the prospectus in that
registration statement and, when filed, the applicable prospectus supplement and
other documents CF Industries files with the SEC for more complete information
about CF Industries and any public offering of securities.
Security holders and investors may obtain any of the foregoing documents,
including the Exchange Offer Documents, for free by visiting EDGAR on the SEC
website at http://www.sec.gov or by calling
Innisfree M&A Incorporated toll-free at (877) 456-3507. Free copies of the
prospectus and the prospectus supplement for any public offering of securities
may also be obtained, when available, from CF Industries or the underwriters to
be identified in the prospectus supplement. SECURITY HOLDERS AND INVESTORS OF CF
INDUSTRIES AND TERRA ARE URGED TO READ ANY SUCH DOCUMENTS CAREFULLY IN THEIR
ENTIRETY BEFORE MAKING ANY INVESTMENT DECISION IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE EXCHANGE OFFER AND ANY
PUBLIC OFFERING OF SECURITIES.
Forward-Looking Statements
Certain statements contained in this press release may constitute
''forward-looking statements.'' All statements in this press release, other than
those relating to historical information or current condition, are
forward-looking statements. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond our control, which
could cause actual results to differ materially from such statements. Risks and
uncertainties relating to the proposed transaction include: Terra's failure to
accept CF Holdings' proposal and enter into definitive agreements to effect the
transaction; our ability to obtain approvals on the proposed terms and schedule;
uncertainty of the expected financial performance of CF Holdings following
completion of the proposed transaction; our ability to incur a substantial
amount of indebtedness in connection with the proposed transaction, to comply
with the covenants in such indebtedness and to make payments under such
indebtedness when due; our ability to consummate an equity offering following
the closing of the proposed transaction; CF Holdings' ability to achieve the
cost-savings and synergies contemplated by the proposed transaction within the
expected time frame; CF Holdings' ability to promptly and effectively integrate
the businesses of Terra and CF Holdings; and disruption from the proposed
transaction making it more difficult to maintain relationships with customers,
employees or suppliers. Additional risks and uncertainties include: the
relatively expensive and volatile cost of North American natural gas; the
cyclical nature of our business and the agricultural sector; the global
commodity nature of our fertilizer products, the impact of global supply and
demand on our selling prices, and the intense global competition in the
consolidating markets in which we operate; conditions in the U.S. agricultural
industry; risks involving derivatives; weather conditions; our inability to
predict seasonal demand for our products accurately; the concentration of our
sales with certain large customers; the impact of changing market conditions on
our Forward Pricing Program; the reliance of our operations on a limited number
of key facilities and the significant risks and hazards against which we may not
be fully insured; reliance on third party transportation providers; risks
associated with joint ventures; risks associated with expansion of our business,
including unanticipated adverse consequences and the significant resources that
could be required; future regulatory restrictions and requirements related to
greenhouse gas emissions, climate change or other environmental requirements;
potential liabilities and expenditures related to environmental and health and
safety laws and regulations; our potential inability to obtain or maintain
required permits and governmental approvals or to meet financial assurance
requirements; acts of terrorism; difficulties in securing the supply and
delivery of raw materials we use and increases in their costs; losses on our
investments in securities; loss of key members of management and professional
staff; the international credit crisis and global recession; and the other risks
and uncertainties included from time to time in our filings with the SEC. Except
as required by law, we undertake no obligation to update or revise any
forward-looking statements.
SOURCE: CF Industries Holdings, Inc.
CF Industries Holdings, Inc.
Senior Director, Investor Relations and
Corporate Communications
Terry Huch, 847-405-2515
thuch@cfindustries.com
or
Brunswick
Group LLC
Susan Stillings / Erin Becker, 212-333-3810
or
Innisfree
M&A Incorporated
Alan Miller, 212-750-5833
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