CF Industries Drops Bid for Terra (CF, TRA)

in ceo Gold Gold Investing Gold Investment by admin — January 15, 2010 7:20 am | no comments

CF Industries Holdings, Inc. ( CF ) on Friday said it has dropped its hostile takeover bid for fellow fertilizer maker Terra Industries ( TRA ) , ending a months-long pursuit. CF intimated that it has sold all of its shares in TRA, noting “It is clear that an acquisition of Terra now would require a significant increase in our offer, given the substantial uplift in equity values in the fertilizer sector,” according to CF CEO Stephen R. Wilson. Terra had repeatedly rejected CF’s offers over the past several months, stating the bids undervalued the company. CF Industries shares jumped $6.71, or +7.2%, in premarket trading Friday, while Terra stock fell $1.02, or -3.1%. The Bottom Line We had removed shares of CF from our “recommended” list back on Sept.21, when the stock was trading at $90.19. The company has a .43% dividend yield, based on last night’s closing stock price of $93.19. The stock has technical support in the $86-$90 price area. If the shares can build on some of the early momentum, we see overhead resistance around the $98-$103 price levels. We would remain on the sidelines for now. Neither CF Industries Holdings, Inc. ( CF ) nor Terra Industries ( TRA ) are currently recommended, with both stocks holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .