DealZone

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?

Fertilizer 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.

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.

In an interview with Reuters today, Agrium CEO Mike Wilson described a phone conversation he had with CF Industries CEO Steve Wilson after 62 percent of CF’s shareholders tendered their shares into Agrium’s hostile bid in June. CF declined to comment on Mike Wilson’s account, which follows:

“The only discussion was a brief phone call from Steve Wilson saying, ‘My shareholders have asked me to engage, so I am phoning you. What do you want Mike?’”

“I said, ‘I would like to meet with you, Steve, and talk about valuation.’ And he said, ‘I don’t want to meet with you, there is no reason to meet.’”

‘Tis the season for unbridgeable gaps.

NRG Energy rejected Exelon’s sweetened (and hostile) bid on Wednesday, saying the $6.9 billion offer was still too low.   

Exelon raised its all-stock offer for NRG by more than 12 percent last week, but investors have not been swayed by the increased price. NRG shares have lost more than 15 percent of their value since Exelon bumped up its bid.   

Exelon has said its increased bid of 0.545 of its shares for every NRG share is its best and final offer. 
Still, NRG called the revised Exelon bid a step in the right direction.  “If you would properly recognize the value created by NRG itself, you would be able to increase your current 0.545 offer by a substantial amount,” NRG wrote in its letter.   

Fertilizer maker CF Industries released the latest in a series of letters to its shareholders on Wednesday in an attempt to defend against a hostile takeover attempt from Agrium.

CF, which is also working on its own hostile offer for rival Terra Industries, listed in the letter the reasons why its shareholders should support its slate of directors at CF’s annual meeting next week, instead of witholding their support as Agrium would like.

CF suggested that Agrium is not serious in its offer, but is instead trying to scuttle CF’s bid for Terra. One of their reasons could be called the “Jewish mother defense”: Agrium hasn’t called or written in ages.