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Terra-Yara Deal In Jeopardy

Terra Industries have asked the Norwegian fertilizer producer Yara International to come up with a better bid on the U.S. company. If not the deal may be off.
“Yara will have no further comments on the response to Terra on the notification until Yara’s Board of Directors has completed their evaluation.”
Yara International

The bidding war on U.S. Terra Industries have intensified Wedensday as Terra have asked the Norwegian bidder Yara International to come up with more money.
Yara International ASA (Yara) has received a notification from Terra Industries Inc. (Terra) that the proposal from CF Industries is, in Terra’s view, a superior proposal to the merger agreement signed February 12th by Yara and Terra,” Yara writes in a short market statement Wednesday afternoon.
This means that the whole deal is in jeopardy.
“As announced on 15 February 2010, Yara and Terra entered into a merger agreement, pursuant to which Yara agreed to acquire all of the outstanding common stock of Terra for $41.10 per share in cash. The merger agreement may be terminated under certain circumstances, including if Terra receives a superior proposal, as that term is defined in the merger agreement, provides advance notice to Yara and Yara does not match the superior proposal within five business days," the statement says.

If Terra terminates the merger agreement under such circumstances, Yara will be entitled to a USD 123 million break-up fee, according to the preliminary deal.

Disclosure: No positions