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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION
STATEMENT UNDER SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
Terra Industries Inc.
(Name of Subject Company)
Terra Industries Inc.
(Name of Person Filing Statement)
Common Shares, without par value
(Title of Class of Securities)
880915103
(CUSIP Number of Class of Securities)
John W. Huey, Esq.
Vice President, General Counsel and
Corporate Secretary
Terra Industries Inc.
Terra Centre
600 Fourth Street
P.O. Box 6000
Sioux City, Iowa 51102-6000
Telephone: (712) 277-1340
(Name, address and telephone numbers of person authorized to receive notices
and communications on behalf of the persons filing statement)
Copies to:
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Faiza J. Saeed, Esq.
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David C. Karp, Esq. |
Thomas E. Dunn, Esq.
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Wachtell, Lipton, Rosen & Katz |
Cravath, Swaine & Moore LLP
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51 West 52nd Street |
Worldwide Plaza
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New York, New York 10019 |
825 Eighth Avenue
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Telephone: (212) 403-1000 |
New York, New York 10019 |
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Telephone: (212) 474-1000 |
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[ ] Check the box if the filing relates solely to preliminary communications made before the
commencement of a tender offer.
This Amendment No. 2 to Schedule 14D-9 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (as amended from time to time, the Statement) originally filed by
Terra Industries Inc., a Maryland corporation (Terra), with the Securities and Exchange
Commission on March 5, 2009, relating to the unsolicited offer by CF Industries Holdings, Inc., a
Delaware corporation (CF), through its wholly owned subsidiary, Composite Acquisition
Corporation, a Maryland corporation, as disclosed in the Tender Offer Statement on Schedule TO,
dated February 23, 2009 (as amended or supplemented from time to time, the Schedule TO), to
exchange each outstanding common share of Terra, without par value (Terra Common Share), for
0.4235 of a share of common stock, par value $0.01 per share, of CF (together with the associated
preferred stock purchase rights) (CF Common Share), upon the terms and subject to the conditions
set forth in (i) the Preliminary Prospectus/Offer to Exchange, dated February 23, 2009 (the
Exchange Offer), and (ii) the related Letter of Transmittal (which, together with the Exchange
Offer and any amendments or supplements thereto from time to time, constitute the Offer).
Capitalized terms used but not defined herein have the meanings set forth in the Statement. Except
as specifically noted herein, the information set forth in the Statement remains unchanged.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
The following is hereby added under the heading Background of the Offer and Reasons for
RecommendationBackground of the Offer of Item 4. The Solicitation or Recommendation beginning
on page 8 of the Statement:
On March 12, 2009, CF filed a preliminary proxy statement on Schedule 14A with the SEC with
respect to its solicitation of proxies to vote in favor of the election of CFs nominees at Terras
2009 annual meeting of stockholders. On the same day, CF issued a press release announcing the
filing of its preliminary proxy materials.
On March 16, 2009, Agrium commenced an exchange offer with respect to all outstanding CF
Common Shares by filing a Tender Offer Statement on Schedule TO and a Registration Statement on
Form F-4 with the SEC. Agrium also issued a press release announcing commencement of its exchange
offer.
On the same day, CF issued a press release stating that it will file with the SEC the required
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Agrium exchange offer
within 10 business days.
On March 19, 2009, CF voluntarily withdrew its Notification and Report Form previously filed
with the Antitrust Division and the FTC on February 18, 2009, relating to its proposed acquisition
of Terra. CF also issued a press release announcing that it would re-file the Notification and
Report Form on March 23, 2009.
On the morning of March 23, 2009, CF filed a Solicitation/Recommendation Statement on Schedule
14D-9 with the SEC recommending that its stockholders reject the exchange offer commenced by Agrium
on March 16, 2009 with respect to outstanding CF Common Shares and not tender their CF Common
Shares pursuant to the exchange offer.
Also on the morning of March 23, 2009, Mr. Wilson sent a letter to the Board reaffirming CFs
intent to pursue a business combination with Terra and stating that CF would be prepared to enter
into a negotiated merger agreement with Terra on the basis of an exchange ratio based on $30.50 for
each Terra Common Share, with an exchange ratio of not less than 0.4129 of a CF Common Share and
not more than 0.4539 of a CF Common Share, the same collar as CFs proposal of March 9, 2009. The
letter read as follows:
March 23, 2009
Board of Directors
Terra Industries Inc.
Terra Centre
600 Fourth Street
P.O. Box 6000
Sioux City, Iowa 51102-6000
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Attention:
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Henry R. Slack, Chairman of the Board |
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Michael L. Bennett, President and Chief Executive Officer |
Dear Members of the Board:
The Board of Directors of CF Industries Holdings, Inc. is reaffirming to you CF
Industries commitment to a strategic business combination between CF Industries and
Terra.
To that end, our Board has determined that CF Industries would be prepared to enter into a
negotiated merger agreement with Terra, structured as outlined in our letter to you dated
March 9, 2009, with an exchange ratio based on $30.50 for each Terra share, the exchange
ratio to be not less than 0.4129 of a CF Industries share and not more than 0.4539 of a CF
Industries share. The $30.50 per Terra share is a premium of over 85% to Terras stock
price before we made our original offer on January 15, 2009.
We continue to believe that a business combination between CF Industries and Terra is a
compelling combination with a number of strategic benefits. We are confident that Terras
stockholders agree with us and will show their support for the transaction by voting for
our slate of directors at Terras 2009 Annual Meeting. We note that the Annual Meeting is
required by Terras by-laws to be held not later than May 15.
Sincerely,
/s/ Stephen R. Wilson
Stephen R. Wilson
Chairman, President and Chief Executive Officer
CF Industries Holdings, Inc.
That day, CF issued a press release disclosing the above letter, as well as a press release
announcing its recommendation to CF stockholders with respect to the exchange offer commenced by
Agrium for all outstanding CF Common Shares.
In addition, on March 23, 2009, CF filed with the SEC a revised preliminary proxy statement on
Schedule 14A with respect to its solicitation of proxies to vote in favor of the election of CFs
nominees at Terras 2009 annual meeting of stockholders.
On the morning of March 24, 2009, the Board met by telephone with members of Terras senior
management, Mr. Loomis and the representatives of the Advisors and MacKenzie. After careful
consideration of the terms of CFs proposal of March 23, 2009, the Board unanimously concluded that
CFs proposal continues to run counter to Terras strategic objectives, substantially undervalues
Terra both absolutely and relative to CF, and would deliver less value to Terras stockholders than
would owning Terra on a stand-alone basis. Later that day, Messrs. Bennett and Slack sent the
following letter to Mr. Wilson:
March 24, 2009
Mr. Stephen R. Wilson
Chairman, President and Chief Executive Officer
CF Industries Holdings, Inc.
4 Parkway North, Suite 400
Deerfield, IL 60015
Dear Mr. Wilson:
The Board of Directors of Terra Industries Inc., with the assistance of its financial and
legal advisors, has carefully considered your latest proposal to combine our companies.
Our Board has unanimously concluded that this most recent version of your proposal
continues to run counter to Terras strategic objectives, substantially undervalues Terra
both absolutely and relative to CF, and would deliver less value to our shareholders than
would owning Terra on a stand-alone basis.
Accordingly, we reject your proposal.
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Sincerely, |
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/s/ Michael L. Bennett
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/s/ Henry R. Slack |
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Michael L. Bennett
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Henry R. Slack |
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President and Chief Executive Officer
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Chairman of the Board |
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cc:
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Board of Directors of CF Industries Holdings, Inc., c/o Corporate Secretary, CF
Industries Holdings, Inc. |
Shortly after delivering the above letter, Terra issued a press release disclosing the letter.
The press release disclosing the letter is filed as Exhibit (a)(4) to this Statement and
incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
Item 8. Additional Information of the Statement is hereby amended and supplemented by adding
the following under the heading Regulatory ApprovalsU.S. Antitrust Approval:
Terra submitted its Premerger Notification and Report Form with the Antitrust Division and the
FTC on March 5, 2009. On March 19, 2009, CF voluntarily withdrew its Notification and Report Form
previously filed with the Antitrust Division and the FTC on February 18, 2009, with respect to its
proposed acquisition of Terra, and announced that it would re-file the same on March 23, 2009. As
a result of a re-filing, a new waiting period would be triggered, which would expire 30 days from
the date of such re-filing, unless either the Antitrust Division or the FTC grants early
termination or requests additional information or documentary material concerning the Offer.
Item 8. Additional Information of the Statement is hereby further amended and supplemented
by adding the following under the heading Regulatory ApprovalsCanadian Antitrust
Considerations:
On March 12, 2009, Terra received a letter from the Competition Commissioner indicating that
CF had made a short-form notification with the Competition Commissioner on March 10, 2009 and that
the 14 day waiting period applicable to the Offer would end on March 24, 2009. That letter
required Terra to submit a short-form notification, which Terra submitted to the Competition
Commissioner on March 23, 2009. On the same day, Terra also sent a copy of its short-form
notification to the Canadian Minister.
The Budget Implementation Act, 2009 became law on March 12, 2009. The Bill included, among
other things, amendments to the waiting periods under the Canadian Competition Act. Instead of the
waiting periods described under the heading Regulatory ApprovalsCanadian Antitrust
Considerations of the Statement filed with the SEC on March 5, 2009, the applicable waiting period
under the Canadian Competition Act for the consummation of a notifiable transaction now expires 30
days after the day on which the notifying party submits the prescribed information, unless earlier
terminated or waived. Prior to such time, however, the Competition Commissioner can extend the
waiting period by sending a notice to the notifying party requiring that it supply additional
information that is relevant to the Competition Commissioners assessment of the notifiable
transaction, as specified by the Competition Commissioner. In the event of such a notice, the
waiting period would be extended until 30 days after the day on which the information required from
the notifying party has been received by the Competition Commissioner. The Bill also reduced to
one year from three years the period following completion of a transaction in which the Competition
Commissioner can apply to the Competition Tribunal for an order under the merger provisions of the
Canadian Competition Act.
Since CF submitted its short-form filing before March 12, 2009 and the Bill does not contain
transitional provisions in this regard, the timing of the expiration of the waiting period for the
consummation of the Offer is unclear.
ITEM 9. EXHIBITS.
Item 9 is hereby amended and supplemented by adding the following exhibit.
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Exhibit Number
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Description |
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(a)(4)
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Press release issued by Terra, dated March 24, 2009, filed
as Exhibit 99.1 to Terra Industries Inc.s Form 8-K dated
March 24, 2009 and incorporated herein by reference. |
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information
set forth in this Statement is true, complete and correct.
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TERRA INDUSTRIES INC.
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By: |
/s/ John W. Huey
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Name: |
John W. Huey |
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Title: |
Vice President, General
Counsel and Corporate Secretary |
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Dated: March 24, 2009