By Ernest Scheyder and Michael Erman
NEW YORK (Reuters) - Terra Industries Inc's
With its nominees elected, CF, which itself is the target of a hostile takeover effort by Agrium Inc
Terra shares climbed 2.2 percent to $38.92 after the vote, while CF shares slipped 2.9 percent to $80.50.
The vote will give CF three of the eight spots on the Terra board, which will now likely be pressed to open negotiations with CF.
"CF's really got their teeth in Terra now. I don't know if any more evasive maneuvers are going to be all that constructive," said Morningstar analyst Ben Johnson.
A combination of CF and Terra would create North America's largest nitrogen fertilizer maker and the world's second-largest nitrogen fertilizer producer behind Norway's Yara International
CF Chairman and Chief Executive Stephen Wilson, who attended the shareholder meeting and shook hands with Terra CEO Michael Bennett after the vote was announced, said it was time for the companies to "move forward" toward a combination.
The vote will also give CF some breathing room in its fight against suitor Agrium after more than 60 percent of CF shareholders agreed to tender their shares under Agrium's $5 billion hostile offer.
"This makes it harder for Agrium to succeed in its bid for CF because as long as CF believes they can pursue Terra, they don't have to get in bed with Agrium," said Broadpoint AmTech analyst Edlain Rodriguez.
"That said, I don't think Agrium is going to give up that easily. I think Agrium is going to keep pushing and I don't think this is the end of this."
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.
(Additional reporting Euan Rocha in Toronto, writing by Matt Daily; Editing by Lisa Von Ahn, Derek Caney and Matthew Lewis)
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