|
 |
|
|
|||
|
 |
|
Oct. 15, 2009 Source: Business Wire CF Industries Holdings, Inc. (NYSE: CF) Wednesday mailed the following letter to the stockholders of Terra Industries Inc. (NYSE: TRA) along with its definitive proxy materials in connection with Terra's 2009 annual meeting. CF Industries is soliciting votes to elect CF Industries' slate of three highly qualified, independent nominees to Terra's board of directors. CF Industries' director nominees are John N. Lilly, David A. Wilson, and Irving B. Yoskowitz. "We are looking forward to Terra's annual meeting on November 20 when Terra stockholders will have the opportunity to show support for CF Industries' proposal for a business combination with Terra," said Stephen R. Wilson, chairman, president and chief executive officer of CF Industries. "We have made a compelling proposal to Terra for an all-stock transaction at a significant premium. Since Terra first proposed a business combination with us in 2004, CF Industries and Terra have had many discussions regarding combining our two companies, including in 2007, when Terra reaffirmed the strategic merits of a combination. Now is the time to advance this compelling business combination by electing our director nominees at Terra's annual meeting." The following letter has been sent to Terra stockholders with CF Industries' definitive proxy statement: Dear Terra Industries Stockholder: At Terra's upcoming annual meeting scheduled for November 20, 2009, we are seeking your support to elect three highly qualified, independent nominees to Terra's board. By voting for our independent nominees, you will show your support for our proposed business combination with Terra, a transaction that offers Terra stockholders a substantial premium and the opportunity to participate in a compelling combination. We urge you to vote FOR our three independent nominees on the BLUE proxy card TODAY. CF INDUSTRIES IS OFFERING A SUBSTANTIAL PREMIUM FOR YOUR SHARES Our proposal provides Terra stockholders a very substantial premium. The proposed exchange ratio of 0.465 of a CF Industries share for each outstanding Terra share represents a premium of over 35% to the 0.3449 unaffected exchange ratio based on the closing share prices of CF Industries and Terra on January 15, 2009, when we announced our initial proposal. This premium is well above the average historical premium for all-stock transactions. In addition, based on our financial performance during 2009, we believe the effective premium we are offering is well above 35%. Since we made our initial proposal in January, our financial performance has exceeded that of Terra significantly. For example, during the first half of 2009, CF Industries generated EBITDA (earnings from continuing operations after non-controlling interest before interest, taxes, depreciation and amortization) of approximately $508 million compared to EBITDA generated by Terra of approximately $218 million. Also during this same period, CF Industries' financial results have exceeded consensus sell-side analysts' profit expectations by a substantial amount. Based on this superior financial performance, we believe that CF Industries' shares would have increased more than Terra's shares during 2009 absent any takeover proposals, and that the premium we are offering is effectively well above 35%. We believe that Terra's stock price would be significantly lower absent our proposal. THE TERRA-CF INDUSTRIES COMBINATION ALLOWS YOU TO PARTICIPATE IN THE UPSIDE AND GROWTH OF THE COMBINED COMPANY, INCLUDING UP TO $135 MILLION IN SYNERGIES We have identified annual cost synergies of up to $135 million expected from elimination of overlapping corporate functions, optimization of transportation and distribution systems, and through greater economies of scale in procurement and purchasing, among other areas. Given the all-stock nature of the transaction, you will be able to participate fully in the stockholder value created from the realization of these synergies. After the combination, we believe the management teams of CF Industries and Terra will identify even more value from operating synergies. COMPELLING STRATEGIC RATIONALE FOR COMBINING TERRA AND CF INDUSTRIES The combined company will be a stronger, more competitive player in the global nitrogen fertilizer industry, becoming the global #2 public company. We believe that the two companies are highly complementary and the strategic rationale of this combination is extremely compelling. The strategic merits of the combination are also well understood by Terra, who first proposed a business combination with CF Industries in 2004. CF Industries and Terra Industries have complementary strengths in nitrogen, providing breadth and flexibility in nitrogen product offerings. In addition, the locations of CF Industries' and Terra's facilities together increase their domestic geographic reach. The two companies' distribution and manufacturing assets combined would enhance service to customers in the agriculturally important central U.S. region, improving the availability, accessibility and timeliness of products to customers. The combined company would also benefit from CF Industries' strong world-scale position in phosphate. Furthermore, the combination of Terra and CF Industries will create a larger, more stable company that will be better positioned to pursue growth initiatives with less risk than either company could pursue alone. Finally, the all-stock nature of the combination will allow Terra stockholders to participate fully in the growth and upside potential of the combined company. You will maintain your exposure to the global fertilizer industry and be invested in a financially stronger, more competitive player. ELECT OUR NOMINEES TO SHOW YOUR SUPPORT FOR THE BUSINESS COMBINATION Our director nominees are highly qualified and bring with them their diverse experiences. * John N. Lilly, president of John Lilly Strategic Insights, LLC and former chief executive officer of The Pillsbury Company. * David A. Wilson, president and chief executive officer of the Graduate Management Admission Council and former managing partner at Ernst & Young LLP. * Irving B. Yoskowitz, senior counsel at Dickstein Shapiro LLP and former executive vice president and general counsel of Constellation Energy Group, Inc., the parent company of Baltimore Gas & Electric Company. None of these nominees is affiliated with CF Industries or has any relationship with CF Industries (except for his agreement to serve as a nominee for Terra's board). The nominees are independent within the meaning of the listing standards of the New York Stock Exchange as well as the Corporate Governance Guidelines of Terra Industries. Our proposed business combination with Terra may only proceed with the approval of Terra's board of directors, and the election of our nominees is an important step towards this transaction. VOTE FOR OUR HIGHLY QUALIFIED AND INDEPENDENT NOMINEES ON THE BLUE PROXY CARD TODAY We are excited about our proposed business combination with Terra Industries and look forward to your support for our nominees and this important transaction. We urge you to sign, date and return the enclosed BLUE proxy card if you hold your shares in your own name or to follow the instructions provided by your broker if you hold your shares in "street name" TODAY with a vote FOR our nominees. If you have any questions or need assistance in voting your shares, please call our proxy solicitor, Innisfree M&A Incorporated, toll free at (877) 456-3507. Sincerely, CF Industries Morgan Stanley and Rothschild are acting as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to CF Industries. Tweet |
|
|
|
|
|
|
|
|
|||||||||||||
