We first visited this theme back in March with a similar post on www.FertilizerWorks.com. Five months later, we are now finally seeing some real cash on the table...or at least some promises of cash.
Last Wednesday CF sweetened their offer to Terra's shareholders, at the same time offering a block of "contingent future shares" to existing CF shareholders. They also promised at least a billion bucks to all shareholders after a merger. While it is not your Grandfather's typical merger offer, in our opinion, it is on the money for the majority of the professional investors who now dominate the ownership of both of these companies.
Most importantly, as time has passed CF has apparently come to terms with the Federal Trade Commission. This is not an insignificant accomplishment given the anti-merger anxiety across the heartland.
The next move is Terra's and they have signaled that their ".... Board of Directors will consider CF Industries' latest proposal at a meeting to be held prior to the end of the month.'' The Wall Street Journal's Deal Blog immediately picked up on this nuanced wording: CF-Terra: Is There Light at the End of the Tunnel?
We agree; the CF-Terra merger has now picked up some detectable momentum. In the meantime, we have also heard recent rumors of White Knights stalking. Is that you Lord Darth?