DealZone

Happy Anniversary Terra! Love, CF

Fertilizer maker CF Industries gave rival Terra Industries an early anniversary present last night.

The company pulled its hostile bid for Terra on Thursday — on the eve of the one-year anniversary of its original bid, which was launched on January 15, 2009.

The withdrawal marks an end to one side of the three-way hostile takeover battle that some have called the “Fertilizer Wars.” Now, Agrium‘s hostile bid for CF Industries, and CF’s defense against that bid, takes center stage.

Agrium said last night that it was still committed to its deal and notified CF that it would be nominating two candidates for that company’s board of directors at this year’s annual shareholder meeting.

That meeting has yet to be scheduled. But with the distraction of the CF’s bid for Terra out of the way, perhaps the Agrium and CF could find common ground before the one-year anniversary of Agrium’s bid comes on February 25?

DealZone Daily

Friday’s highlights:

Citigroup Inc could pay commercial and investment banking bonuses for 2009 that are similar to 2008 levels, and may cap individual cash payouts at about $60,000, according to people that have been briefed on the plan.

CF Industries Holdings Inc (CF.N) withdraws its year-long hostile bid to buy rival fertilizer maker Terra Industries Inc (TRA.N) on Thursday, bringing a three-way battle for control of the North American fertilizer business closer to a conclusion.

Shiseido Co Ltd, Japan’s largest cosmetics company, agrees to buy U.S.-based Bare Escentuals Inc for $1.7 billion, as it looks to revamp its global brand and expand in North America.

Terra directors back on the board

tractorFertilizer maker Terra Industries rejected another bid from CF Industries Inc on Sunday. But tucked into that rejection was another piece of news that some might have missed — Terra has reappointed the three directors that shareholders voted down last week in favor of a slate of directors backed by CF. The Terra directors that lost out to the CF slate included Chairman Henry Slack.

“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,” Terra wrote near the bottom of its Sunday night statement. “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.”

The move — although possibly dilutive to shareholder democracy – was not necessarily unexpected.

Terra sees green in CF’s bid

The three-way fertilizer fight between CF Industries, Terra and Agrium may be approaching its end game. Over the weekend, CF raised the cash portion of its hostile offer for smaller rival Terra. It said it was able to add more cash because of strength in stock and debt markets.

CF is itself fending off a hostile takeover bid from Agrium. Last month, possibly throwing a monkey wrench into CF’s bid for Terra, Agrium said it would sell part of a nitrogen fertilizer facility to Terra to overcome regulatory issues related to its hostile takeover bid for CF.

In its latest move, CF is offering $32 in cash — including a $7.50 special dividend that Terra plans to pay — and 0.1034 of a share of CF common stock for each Terra share. That would amount to $40.61 per share based on CF’s Friday closing price and represents a 28 percent premium to Terra’s Friday closing price, the company said in a statement. It is about 5 percent higher than CF’s previous stock bid of 0.465 CF shares for every Terra share.