Rentech Receives Sherwood's Offer - Kind Of

Sherwood has now offered Rentech (RTK) a buyout at $2.28/share, subject to "due diligence and the reaching of acceptable terms", similar to how they worded their offer to buyout Transworld. The stock went from $1.80 to a high of $2.02 after the announcement, but is now settling back at around $1.90. Obviously, the market doesn't think this will happen as there is still about a ~20% difference in the stock price and the offer price. Again, I don't think they take it per the rationale in my original post, but who knows. Below is the text of the letter.

December 18, 2007

Via Fax & Mail

Subject to Contract

Dear Mr. Ramsbottom,

Further to our letter of November 19, 2007, Sherwood Investments Overseas Ltd. has now accumulated an interest in 5,292,000 shares of Rentech, Inc. (RTK)representing 3.24% of the shares outstanding.

Over the past month we have had several discussions with various shareholders and while we have not been able to reach agreement on a course of action, there does appear to be some general frustration with the value that the market is ascribing to Rentech. Nonetheless, we remain excited by Rentech and its prospects. Consequently, Sherwood Investments has decided to offer $2.28 per share for all of the outstanding shares of Rentech, Inc. subject to appropriate due diligence and the reaching of acceptable terms. This offer represents a premium of more than 30% to your closing price last night. Please understand that this is an offer and not an "offer to make an offer".

We look forward to sitting down with management so that we can expeditiously negotiate the details of a transaction.

Yours sincerely,

Julian M. Benscher

Authorized Signatory

Sherwood Investments Overseas Limited

Disclosure: Long RTK