M&A

13 November, 2009

CORRECTED - Terra could reappoint own directors despite vote

Corrects third paragraph to reflect that CF would not be able to ignore shareholder vote)

NEW YORK, Nov 13 (Reuters) - CF Industries Holdings Inc (CF.N) sent a letter to Terra Industries Inc (TRA.N) shareholders on Friday saying that Terra would be able to reappoint its own directors to its board under Maryland law even if shareholders vote for a competing slate backed by CF.

CF launched a hostile bid for Terra in January and has placed a slate of three directors up for election at Terra's annual meeting next week.

In the letter, CF Chief Executive Stephen Wilson asked Terra shareholders to back the CF slate, but said Terra would legally be able to reappoint its directors, as well as the dissident slate if CF is successful.

"We understand that, under Maryland law, the Terra Board of Directors could reappoint those directors to the Terra board," Wilson said in the letter.

"If the Terra board decided to take such action in the exercise of its fiduciary duties (without disenfranchising stockholders through increasing the size of the board beyond what would result from reappointing those directors), we would not be in a position to object."

Terra declined to comment on the letter.

Terra's annual meeting is scheduled for Friday, Nov. 20. CF is itself the target of a hostile takeover bid from Canada's Agrium Inc. (AGU.TO) (Reporting by Michael Erman, editing by Matthew Lewis)

Source: http://www.reuters.com