CF Industries has delivered a major blow in its battle to seal a hostile $4.1bn bid for Terra Industries by having three nominees voted onto its target company's board.
Terra - whose losing slate included chairman Henry Slack - said that, following a vote at its annual meeting on Friday, "it appears that CF Industries' three nominees were elected to the Terra board".
While final results will be announced in two weeks' time, following verification by independent poll regulators, CF said that a preliminary count had shown its candidates were elected "by a substantial margin".
'Time to move forward'
CF - which itself had a Terra stake of at least 7% of with which to vote - has long raised the meeting as key stepping stone to bid victory.
|
Losing slate - Terra's nominees
Martha Hesse, former chief executive of Hesse Gas Co. Chairman of US Federal Energy Regulatory Commission 1986-89
Henry Slack, Terra chairman since 2001, and director of E Oppenheimer & Son Intl.
Dennis McGlone, former chief executive of Copperweld Corp |
Stephen Wilson, the CF chief executive, who shook hands with Terra boss Michael Bennett after the meeting, said: "It is time to move forward and put these two great companies together."
Terra said that although it was "disappointed" with the result, it appreciated the "input" from investors.
"Terra shareholders noted that current trends in the fertilizer market could provide potential consolidation opportunities for many market participants," the Iowa-based nitrogen group said.
'Far from certain'
And, in New York, Terra's share price caught up a with the value implied by CF's offer, potentially a signal that markets are factoring in a raised chance of the deal - or even a higher bid - being successful.
|
On their way in - CF's nominees
John Lilly, former chief executive of US food group Pillsbury
David Wilson, chief executive of the Virginia-based Graduate Management Admission Council
Irving Yoskowitz, senior counsel in the energy practice at Dickstein Shapiro, a law firm on America's east coast |
CF shares closed down $0.14 at $82.73, valuing its cash-and-shares bid at $40.55 per Terra share.
Terra stock ended up 5.1% at $40.06.
Nonetheless, some observers have not viewed the vote as the last word on the takeover battle, which has already lasted 11 months.
CF's candidates, with which the company says it has no affiliations or relationships beyond the agreement to stand at Friday's meeting, will be in a minority on Terra's eight-member board.
CF is also still facing down its own hostile approach from Canada's Agrium, which has attracted significant investor support.
Agrium said that Friday's Terra vote was "irrelevant" to its CF bid. CF's board had an "obligation" to its shareholder, who have sent a "clear and unambiguous message" in favour of a tie-up with Agrium.
'Significantly higher price'
Analysts at Sterne Agee, the US broker, said that Terra would now have "little choice but to consider negotiations" with CF
However, they expected Terra to hold out for a higher bid.
"CF's own analysis suggests that a higher bid could be easily justified. Terra's newly reconstituted Board is likely… to seek a significantly higher price."
"We expect CF to be willing to raise its bid further, and perhaps significantly."
PRINTABLE VERSION
EMAIL TO A FRIEND
RSS FEEDS
