CF Industries has – for a fourth time – altered its bid terms in an effort to seal its takeover of rival fertilizer group Terra Industries, adding an extra $475m in cash to take the bid to $4.6bn.
CF said it was prepared to meet "immediately" to sign an agreement on its new terms, which offer $4.75 in cash plus 0.1034 CF shares per Terra share.
The revised offer, which sent Terra stock soaring 6.6%, was subject only to due diligence, which could be "completed over this coming weekend".
"It is time to sign a merger agreement and put these two great companies together," Stephen Wilson, the CF chairman and chief executive, said.
"We have made a compelling offer."
The bid valued Terra shares at $45.91 apiece as of Friday's closing share prices, before payment of a $7.50-a-share special dividend due on December 11.
'High'premium
The latest bid offers a premium of more than 50% to where Terra shares would be trading without takeover interest, "substantially above historical and recent transaction premiums", he said in a letter to the Terra board.
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Fifth time lucky? CF's bids for Terra
Dec 7: raises to 0.1034 CF shares plus $36.75 cash. Terra shares worth $45.91
Nov 1: lifts to 0.1034 CF shares plus $32.00 cash. Terra shares worth $40.61
Aug 5: raises to 0.465 CF shares. Values Terra shares at about $37.50
Mar 23: amends to 0.4129-0.4539 CF shares, based on $30.50 per Terra share
Jan 15: bids 0.4235 CF shares per Terra share. Values Terra shares at $20.00
Bid values as of time of announcement |
It offered a multiple of 10 times Terra's earnings before interest, tax, depreciation and amortisation.
"Our offer is not subject to financing and CF Industries has satisfied all antitrust regulatory conditions required to close the transaction," Mr Wilson added.
Terra said that, "consistent with its fiduciary duties", it was "reviewing the revised proposal and expects to consider it at a board meeting scheduled for later in the week".
However, analysts at Sterne Agee said CF's latest offer, while "credible", was likely to be rejected.
"With CF's financing expiring soon, nitrogen prices already rising... we think Terra can reject this offer without too much risk," the US broker said.
Financing deadline
CF's move comes ahead of an end-of-month deadline set by Morgan Stanley, the investment bank, on a financing package for the bid.
It also comes as Canada's Agrium is ramping up its own plans to buy CF. Agrium last week unveiled plans to get a slate of its directors voted on to the CF board at the US group's 2010 annual meeting.
The ruse copies a CF strategy which has succeeded in getting three nominees onto the Terra board.
CF shares stood $0.19 lower at $88.36 in morning deals in New York, valuing Terra shares at $45.89.
Terra stock stood $2.57 higher at $41.62.
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