CF Industries Holdings Inc. (CF) announced it has bought a 7%
stake during the past two weeks in fellow fertilizer maker Terra
Industries Inc. (TRA) as it confirmed plans to boost its all-stock
offer to about $3.9 billion.
The announcement is the latest move in a three-way struggle for
power in the fertilizer industry. Since the start of the year,
Terra has repeatedly refused offers from CF, which is the subject
of a $3.7 billion takeover attempt by Agrium Inc. (AGU). The
industry is under strong pressure to consolidate after prices
plunged from last year's highs.
Monday, CF offered to exchange its own shares at a ratio of
0.465 for each Terra share, which would be adjusted after Terra
pays its planned $7.50 a share special dividend announced Thursday.
CF said in early August it was prepared to raise its bid to 0.465
share from as much as 0.4539 share.
The new bid values Terra at $39.19 a share, an 11% premium to
Friday's closing price.
CF said the 7% stake, purchased for $247 million, demonstrated
its commitment to a deal with Terra.
CF shares were down 19 cents to $84.10 in early trading while
Terra rose 1.3% at $35.65.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com