Well, shareholders have now voted in favor of three CF nominees at Terra's annual meeting. Who's out of touch now?
This voting follows a final volley of shareholder letters and press
releases that pelted my inbox over the past week or two. Terra trumped
up the three proxy advisory firms backing its own slate of Director
nominees, while trashing a fourth. The firm accused the supposedly
"flawed and contradictory" report by RiskMetrics Group of employing
"tortured arguments, flawed analysis and contradictory reasoning."
Harsh!
Interestingly enough, RiskMetrics has also recommended that CF
shareholder tender to Agrium's bid. Bankers and lawyers must love this
firm!
Meanwhile, CF mostly just rehashed some familiar points in favor of the combination of the two firms:
- A compelling premium with a cash component offering "certainty of value"
- No financing condition or shareholder approval required
- Strong strategic rationale, given enhanced scale and financial clout
Terra shareholders are a pragmatic bunch. By this point, it's become
quite clear that CF isn't backing down. Voting some CF nominees onto
Terra's Board is a prelude to negotiations. It doesn't seal the current
offer in place, but rather opens the door to a final bid somewhere down
the road. I view this as the most likely outcome. Agrium came close to
winning this three-way tug-of-war, with 62% of CF shareholders
tendering to its offer this week, but the Terra results really throw a
wrench in that firm's plans.
© 2009 UCLICK L.L.C.
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