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Opinion: CF boss hasn't earned his spurs yet

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Stephen Wilson has a long way to go to prove himself as a dealmaker.

Sure, the CF Industries boss has gained some credentials by getting three of his candidates on to the board of Terra Industries, the rival fertilizer group he is trying to buy for $4.1bn.

That required strategic finesse. It shows that he has more tricks in his locker than making ever-larger bids.

But his task isn't over yet.

Not there yet

For a start, he has yet to win Terra's scalp.

Certainly, he looks a lot closer now he has three of his placemen as Terra directors.

But their room for manoeuvre is not limitless. They are in a minority on the Terra board. What's more, they will be closely watched by the Terra investor base to ensure its interests, rather than CF's, are put first.

Doubled up

And assuming he does win, what will be the cost?

While Mr Wilson looks canny in moving on Terra in January – when stock prices were still at bargain basement levels – his failure to seal the deal by now has served investors poorly.

He has near-doubled the value of his bid, and still the takeover isn't in the bag.

Moving earlier to deploy CF's huge cash reserves, as suggested, and delivering a knockout bid might have spared his investors the pain of a marathon courtship.

Black mark

Indeed, he has put his CF shareholders through the mill. Which is a black mark against him.

If Mr Wilson is so confident a Terra deal is worth it, he should have the guts to put his case to shareholders rather than finding ways to avoid facing them down.

Given such treatment, it is little surprising that they have – twice – voted by a clear majority for a takeover by Canada's Agrium.

And he should not take too much solace from his, apparent, support from Terra investors. They won't be around if a deal succeeds, now that he's loaded his bid with cash, and is offering only a fraction in CF shares.

Time will tell

For Mr Wilson to prove himself as a dealmaker, he needs to deliver Terra. And for a price he can justify by the value the deal creates for his investors.

To win both the war and the peace.

Indeed, his credentials may be better judged by the manner with which he eventually quits CF, rather than that with which he leaves the field of battle with Terra.


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