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Opinion: CF's boss is either assured or anxious

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Steven Wilson is either assured or anxious.

The CF Industries boss looks more credible now that he has raised his bid by more than 10% to $4.6bn.

That's certainly given his three nominees on the Terra board quite some ammunition to argue his case at a meeting later this week.

The question is why he's raised his bid now, before his candidates – who will not be in a majority on the 11-member board – have had time to bed in.

Two explanations

One answer is that he is confident that a win is now in sight.

With his placemen in his target's cockpit, and following conversations with the group's investors, it's possible he believes that the extra cash will be enough to tip the balance his way.

Another is that he is worried that victory is eluding him.

Mr Wilson faces two deadlines – the first on his bid financing, which expires at the end of the month.

The second is next year's CF annual meeting, at which Canada's Agrium, which is bidding for the US group, will attempt a copycat move of getting its candidates on to Mr Wilson's board.

If the CF boss was afraid for either of these dates, that too could explain his enthusiasm to get a deal done now.

Financing question

In fact, even if he wasn't afraid of the financing deadline, he may have been better demonstrating as much by getting shot of it.

As it is, Morgan Stanley's apparent reluctance to extend its facility beyond the end of this month raises a question over CF's bid.

That might not matter if Terra is indeed willing to settle for a price below the $50s-a-share its mood music has been singing for.

But it's easy for even the best-laid plans to be thrown out by, perhaps in this case, the rising nitrogen prices which are boosting Terra's prospects.

And overconfidence would be another way to ensure Mr Wilson left empty handed.

By Mike Verdin

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