Norwegian Yara International have decided to back out of the bidding war on the American company Terra Industries, Yara says in a market statement Friday morning. Terra will have to pay Yara USD 123 million for breaking up the engagement. At Oslo Stock Exchange the Yara shares slides.
“Terra would be a perfect fit to Yara and attractive at our proposed valuation, but we will not increase our offer that was first accepted by the Terra Board.”
Jørgen Ole Haslestad
Yara International ASA (Yara) has notified Terra Industries Inc. (Terra) that it will not propose an improvement to the cash merger agreement signed 12 February by Yara and Terra.
As announced March 10th, 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 by Yara and Terra.
“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,” Yara International says in a market statement Friday morning.
“If Terra terminates the merger agreement under such circumstances, Yara will be entitled to a USD 123 million break-up fee payable concurrently with merger agreement termination,” Yara points out.
“Terra would be a perfect fit to Yara and attractive at our proposed valuation, but we will not increase our offer that was first accepted by the Terra Board. The growth ambition of Yara will be carried out for the future on the same value generating basis as the company has done successfully in the past. US remains an attractive market for us and we will continue to search for opportunities to grow our business in the region. We remain the global leader in the fertilizer industry, and there will be more opportunities around the world to grow our business further”, Jørgen Ole Haslestad, President and CEO of Yara International ASA says.
According to the short statement, Yara continues to use all appropriate efforts to consummate the merger and reserves all rights under the merger agreement until such time, if ever, as the merger agreement is terminated in accordance with its terms.
At Oslo Stock Exchange the Yara shares slides to NOK 252, from NOK 254, in the opening trade.
Yara’s share price have been falling lately on concern that the Terra-merger would be a very costly affair for the Norwegian fertilizer producer.
The benchmark index (OSEBX) is up 0,6 percent.
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