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News from Reuters

Terra shareholders elect CF nominees to board

20/11/09

By Ernest Scheyder

NEW YORK (Reuters) - Terra Industries Inc's shareholders elected a slate of three board members proposed by CF Industries Holdings Inc , giving CF a major victory in its bid to buy the company.

With its nominees elected, CF, itself is the target of a hostile takeover effort by Agrium Inc , may face pressure to settle a deal to buy Terra quickly, as its financing with Morgan Stanley expires on November 30.

Terra shares climbed 2.5 percent $38.79 after the vote, while CF shares slipped 2.5 percent to $80.82.

Deerfield, Illinois-based CF, which first moved to buy Terra last January, is currently offering $24.50 in cash and 0.1034 of a share for every Terra share.

Terra's incumbent board has also declared a special dividend of $7.50 a share, which stockholders will receive on December 11 regardless of whether the company reaches a deal with CF.

The current value of CF's bid is $33.07 without the dividend and $40.57 with it. Including the dividend, the deal is worth roughly $4.05 billion, based on Thursday's close.

Terra's current board had nominated three of its own candidates, and both sides have aggressively courted shareholders in the past few months, all but begging for support.

(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn and Derek Caney)

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