CF Industries Files Lawsuit

Deerfield-based CF Industries Holdings Inc. (CF - Analyst Report) filed a lawsuit against Terra Industries Inc. (TRA) to force the company to convene a shareholder meeting for a business combination being pushed by CF.

Fertilizer maker Terra responded that its board has decided to hold an annual meeting on Nov. 19. The company had postponed the meeting when larger rival CF Industries launched an unsolicited bid in April this year. In its statement, CF noted that Terra's last annual general meeting (AGM) was held nearly 16 months ago and according to law, AGMs must be held on an annual basis.

Terra repeatedly rebuffed CF’s takeover bid stating that the offer substantially undervalues the company. CF’s all-stock offer for Terra Industries has expired and the company does not plan to extend the offer because of opposition from Terra's board. However, CF stated that it continues to pursue Terra.

CF is offering a 35% premium in an all-stock takeover bid. The company raised its offer this month to 0.465 shares of CF for each share of Terra, which makes and sells nitrogen products. In January, CF had made an offer valued at around $2.1 billion, raising it in March to about $2.2 billion.

CF is a holding company for CF Industries, which sells nitrogen and phosphate fertilizers. CF is itself fending off a hostile bid from larger Canadian rival Agrium Inc. (AGU - Analyst Report). CF maintains that Agrium's offer undervalues the company. CF also believes that Agrium intends to distract its hostile takeover bid for Terra.

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