Terra Industries Inc. (NYSE:TRA) today announced that, over the weekend,
CF Industries Holdings, Inc. (NYSE: CF) submitted a proposed merger
agreement to Terra, containing the same economic terms as its most
recent proposal from November 1, together with a 30-day “go shop”
provision subject to a break up fee and expense reimbursement. Terra’s
Board of Directors previously rejected CF’s proposal as financially
inadequate, and has once again concluded that the proposed merger
agreement does not provide any basis for engagement with CF.
During the weeks leading up to the Annual Meeting, Terra shareholders,
including those that voted for CF, delivered a consistent message to
Terra’s Board and management team that CF’s proposal to acquire Terra
for $24.50 in cash and 0.1034 of a share of CF common stock is
inadequate. At Terra’s Annual Meeting, it appears that only 38% of the
outstanding shares unaffiliated with CF voted in favor of CF’s nominees.
Excluding the approximately 7% of Terra’s outstanding shares that are
owned by CF, the preliminary voting results indicate that CF’s nominees
were elected by a very narrow margin of approximately 2%, underscoring
the absence of any mandate for CF’s inadequate proposal.
“As I said at our Annual Meeting, our shareholders have provided us with
many differing perspectives and we welcome that input and will take all
views into account,” said Michael Bennett, Terra President and Chief
Executive Officer. “Nothing about the vote changed the value of CF’s
proposal. We continue to believe that Terra’s current strategy, which
capitalizes on our attractive product mix, diversified customer base and
geographic advantages, will deliver greater value than CF’s proposal.
Accordingly, our focus continues to be executing on our strategy to
deliver results for Terra shareholders.”
Terra is well-positioned to benefit significantly from an expected
upsurge in demand for nitrogen as the economic recovery continues.
Terra’s 2010 EBITDA estimate of $694 million underscores Terra’s strong
prospects, and the inadequacy of CF’s latest proposal. Year-to-date,
Terra’s share price has appreciated approximately 130%. The entire
fertilizer sector – and Terra in particular – will benefit from an
anticipated strong growing season, strengthening corn and nitrogen
prices and moderate gas costs. Terra shareholders will receive their
$7.50 per share special cash dividend on December 11, and Terra remains
committed to returning profits to shareholders in the form of dividends
and buybacks. Over the past four years, Terra has returned more than $1
billion to shareholders in this manner.
Once the election results are certified, Terra’s Board will welcome
three new directors, John N. Lilly, David A. Wilson, and Irving B.
Yoskowitz. In addition, the Board, by unanimous vote of the directors
whose terms do not expire this year, has taken steps to expand to eleven
members, to be effective at that time, so that Terra’s three
highly-qualified and experienced independent directors, Martha O. Hesse,
Dennis McGlone and Henry R. Slack, will continue to serve on the Board.
The Board believes that Terra’s shareholders will benefit the most by
combining this experience with the new perspective of the three
additions to the Board.
Credit Suisse Securities (USA) LLC is serving as Terra’s financial
advisor, and Cravath, Swaine & Moore LLP and Wachtell, Lipton, Rosen &
Katz are serving as legal counsel to Terra.
About Terra
Terra Industries Inc., with 2008 revenues of $2.9 billion, is a leading
North American producer and marketer of nitrogen products.
Forward-Looking Statements
Certain statements in this communication may constitute
“forward-looking” statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
based upon assumptions as to future events that may not prove to be
accurate. Actual outcomes and results may differ materially from what is
expressed or forecasted in these forward-looking statements. As a
result, these statements speak only as of the date they were made and
Terra undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as otherwise required by law. Words
such as “expects,” “intends,” “plans,” “projects,” “believes,”
“estimates,” and similar expressions are used to identify these
forward-looking statements. Forward-looking statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. These risks, uncertainties
and assumptions include, among others:
risks related to potential acquisition transactions,
changes in financial and capital markets,
general economic conditions within the agricultural industry,
competitive factors and price changes (principally, sales prices of
nitrogen and methanol products and natural gas costs),
changes in product mix,
changes in the seasonality of demand patterns,
changes in weather conditions,
changes in environmental and other government regulation,
changes in agricultural regulations and
changes in the securities trading markets.
Additional information as to these factors can be found in Terra’s 2008
Annual Report/10-K and in Terra’s subsequent Quarterly Reports on Form
10-Q, in each case in the sections entitled “Business,” “Risk Factors,”
“Legal Proceedings,” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” and in the Notes to the
consolidated financial statements.
This communication includes projected financial performance information
from Terra's 2010 financial plan. These projections are necessarily
based upon a variety of estimates and assumptions, including published
third-party forecasts for product selling prices and current
basis-adjusted Nymex natural gas futures prices, which, though currently
considered reasonable by Terra, may not be realized and are inherently
subject, in addition to the specific risks identified above, to
business, economic, competitive, industry, regulatory, market and
financial uncertainties and contingencies, many of which are beyond
Terra's control. There can be no assurance that the assumptions made in
preparing the projected financial performance information will prove
accurate. Accordingly, actual results may differ materially from the
results projected.
Note:
Terra Industries’ news announcements are also available
on its Web site,
www.terraindustries.com
.
Terra Industries Inc.
Joe A. Ewing, Vice President, Investor
Relations
712-277-7305
jewing@terraindustries.com
or
Joele
Frank, Wilkinson Brimmer Katcher
Matthew Sherman/Jamie Moser
212-355-4449
msherman@joelefrank.com/jmoser@joelefrank.com