Terra Industries asks shareholders to reject CF Industries nominees

By Lisa Kerner

Charlotte, N.C., Oct. 22 - Terra Industries Inc. urged shareholders in a letter on Thursday to re-elect the company's director nominees - Martha O. Hesse, Dennis McGlone and chairman Henry R. Slack - at the annual meeting on Nov. 20.

"We are confident that Terra has the right board and management team in place executing the right strategy for the benefit of all of our shareholders," Slack and president and chief executive officer Michael L. Bennett said in the letter.

Shareholders were asked to reject CF Industries Holdings, Inc.'s three nominees, which, if elected, would advance CF Industries' merger proposal with Terra, according to the letter.

Bennett made a similar plea to shareholders last week.

Over the last nine months, CF Industries has made five separate proposals to acquire Terra, none of which showed any material improvement over the initial unsolicited offer that CF Industries made on Jan. 15, 2009, Slack and Bennett said.

According to Bennett and Slack, Terra's board and management team are "continually exploring ways to further strengthen and grow Terra's business for the long term."

Earlier in the week, Bennett said Terra announced it planned to purchase 50% of Agrium Inc.'s Carseland, Alta., nitrogen complex in order to expand Terra's geographic footprint and diversify its nitrogen product mix.

"We plan to continue to look for similar opportunities to put capital to work for our shareholders' benefit," Slack and Bennett said in the letter.

Terra turns down offer

Terra rejected CF Industries' most recent unsolicited proposal to acquire the company for 0.465 of a share of CF Industries for each share of Terra.

CF Industries terminated its exchange offer for Terra, a Sioux City, Iowa, nitrogen products company, in August.

Agrium, a Calgary, Alta., fertilizer company, began an unsolicited exchange offer in March 2009 for CF Industries after CF Industries rejected its offer in favor of pursuing a deal with Terra.

In exchange for each CF Industries share, shareholders will receive $40.00 in cash plus one Agrium share.

As previously reported, Agrium extended its tender offer for CF Industries to midnight ET on Oct. 22 from Sept. 22.

Deerfield, Ill.-based CF Industries Holdings is the holding company for CF Industries, Inc., a producer and distributor of nitrogen and phosphate fertilizer products.

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