Can the Terra Board Afford Not to Accept Sweetened CF Bid? - trackseekingalpha

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Can the Terra Board Afford Not to Accept Sweetened CF Bid?
Aug 10, 2009 12:27 PM UTC

trackseekingalpha

Return	Risk
-13.40%	HIGH

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Symbol	Sentiment	Start	Return	Closed
TRA	n/a
CF	n/a

Via Long Investment Ideas from Seeking Alpha:

Last week,CF Industries (CF) upped its bid for Terra Industries (TRA) from its prior bid of 0.4129 to 0.4539 shares to 0.465 CF shares. The deal currently values TRA at nearly $39 share (.465 x $83 CF share) or 30% above its Friday closing price of $29.91. How could the Terra Board of Directors turn down such a sweet offer?

Many reasons exist for turning down a premium offer. For example, shareholder growth would be higher as an independent compared to being part of a conglomerate, shareholders want cash for various reasons including the premium can be wiped out if the acquiring company's price drops after announcing the deal, or the premium just isn't large enough to cash out.

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