Fertilizer Merger Wars Heating Up (TRA, CF, AGU, MOO)

The president and CEO of Terra Industries Inc. (NYSE:TRA) has apparently purchased 100 shares of stock in CF Industries Holdings, Inc. (NYSE:CF) and requested CF to provide him with a list of all CF shareholders so that he can get in touch with them. CF’s CEO is not amused. In his reply, he asked why Terra’s chief appears to be more interested in communicating with stockholders than in negotiating a merger agreement with the company.

CF’s CEO also wanted to know when Terra was scheduling its annual meeting, which was due by May 15th. In response, according to Reuters, Terra has announced a change in its bylaws requiring the company only to hold its annual meeting sometime during the year.

But CF management also took a shot from Agrium Inc. (NYSE:AGU). Responding to a letter earlier this week from CF management to its own stockholders, Agrium has issued another plea for proxies denying CF’s slate of nominees to CF’s board.

Just to recap: Agrium made an unsolicited offer for CF worth about $6.2 billion. CF later made an unsolicited offer for Terra worth about $3 billion. Both offers have been fought hard by current management teams.

CF’s annual meeting is scheduled for April 21st, so there’s not time for many more letters to shareholders.

Shares in Terra are up slightly today, while both Agrium and CF shares are down slightly. Even volumes seem very low today. Maybe traders just want this saga to end.

The Market Vectors Agribusiness ETF (NYSE: MOO) is trading up 1% at $30.59 this morning.  Some of these companies may be ripe for the picking, but the outlooks from these for the rest of the year are not the rosiest out there.

Paul Ausick
April 15, 2009