Oct. 27, 2009 (Business Wire) -- CF Industries Holdings, Inc. (NYSE: CF) today sent the following letter to the stockholders of Terra Industries Inc. (NYSE: TRA).
Dear Terra Industries Stockholder:
Terra’s annual meeting on November 20, 2009 is less than a month away. CF Industries is nominating three highly qualified, independent nominees to Terra’s board of directors. We believe that the election of these nominees is the best way to deliver superior value to you through our proposed business combination with Terra. We urge you to vote FOR our nominees on the enclosed BLUE proxy card TODAY.
A vote for our highly qualified, independent nominees at Terra’s annual meeting will voice your support for the proposed business combination with Terra.
CF INDUSTRIES IS OFFERING YOU COMPELLING VALUE FOR YOUR SHARES
We are offering Terra stockholders an exchange ratio of 0.465 of a CF Industries share for each outstanding Terra share. This represents a very substantial premium of 35% to the unaffected exchange ratio when we first announced our proposal.
While 35% is already a very attractive premium, we believe it is actually significantly higher when considering the financial performance of CF Industries and Terra this year. In the first three quarters of 2009, CF Industries significantly outperformed Terra Industries. As a result, we believe that CF Industries shares would have increased more than Terra shares during 2009 absent any takeover proposals, and that the premium we are offering is meaningfully higher than 35%.
TERRA HAS ALWAYS SEEN STRATEGIC MERITS OF BUSINESS COMBINATION WITH CF INDUSTRIES
Terra has itself recognized the strategic rationale for combining the two companies, and it was Terra who first approached CF Industries about combining the companies. Since Terra’s approach in 2004, Terra and CF Industries have had multiple conversations about a business combination and as recently as 2007, Terra affirmed the strategic merits of a combination.
In slides from Terra’s own presentation when it first approached CF Industries, Terra’s objective for a combination with CF Industries was to “create a strong platform for future profit opportunity through”:
- significant synergies
- broad market coverage
- substantial market share
- product sourcing flexibility for customers
- platform for growth through future consolidation opportunities
Terra also emphasized that the combination would “create a coast-to-coast marketer of UAN, urea and ammonia” and outlined value creation through:
- administrative synergies
- significant customer base
- equipment / terminal / transportation synergies
- market mass
- sourcing flexibility
- business systems
- best practices (management / culture combination)
CF Industries believes that the opportunity to create shareholder value is clear and that both sets of stockholders, boards and management teams understand the compelling strategic rationale of the business combination.
CF INDUSTRIES’ BOARD AND MANAGEMENT HAVE A PROVEN TRACK RECORD OF CREATING VALUE FOR STOCKHOLDERS
CF Industries’ board and management team are committed to generating shareholder value. CF Industries has provided its stockholders with the highest share price appreciation and total shareholder return among public fertilizer companies since its IPO in August 2005 to January 15, 2009 (when we made our initial proposal to combine with Terra). In April 2009, the company was named second in the BusinessWeek 50, which ranks top-performing public companies within the S&P 500 by average return on capital and growth over a three-year period.
Building on this strong track record, CF Industries expects to continue to deliver for its stockholders through a business combination with Terra.
