Dow, Rohm maneuver ahead of trial; CF takes time on Agrium offer; Gevity trades at discount to bid

By Cristal Cody

Tupelo, Miss., March 5 - Shares of Dow Chemical Co. fell to a low not seen in 24 years on Thursday as the company readies for a trial on the takeover of Rohm & Haas Co.

However, late reports suggest Dow and Rohm & Haas are in settlement talks. Company representatives could not be immediately reached for comment.

Terra Industries Inc. said Thursday it's not interested in the hostile takeover offer from CF Industries Holdings, Inc., which now is facing its own hostile takeover attempt from Agrium Inc.

Charles A. Nekvasil, director of public and investor relations for CF Industries, told Prospect News on Thursday that the company has no timeframe in regards to a decision on the offer.

In other action on Thursday, shares of Gevity HR, Inc. shot up $1.71, or 84.24%, to close at $3.74 after a cash buyout offer was revealed.

The stock, though, never reached the bid price of $98 million, or $4.00 a share, from human resources outsourcing firm TriNet Group, Inc.

Meanwhile on Thursday, stocks picked up their slide and sent the Dow Jones Industrial Average and the S&P 500 index down to 12-year lows.

The Dow sank 281.40 points, or 4.09%, to 6,594.44.

The S&P 500 lost 30.32 points, or 4.25%, to close at 682.55, and the Nasdaq Composite index dropped 54.15 points, or 4.00%, to end the session at 1,299.59.

Court rumble ahead for Dow, Rohm & Haas

Dow shares traded as low as $6.30 before closing at $6.47, down 59 cents, or 8.36%, on Thursday.

The trial starts Monday in Delaware in the lawsuit filed by Rohm & Haas after Dow failed to close on the $15 billion acquisition in January.

The company had offered $78.00 a share for Rohm & Haas but wanted to delay the deal after a Kuwait joint venture broke up. Dow had planned to use part of the proceeds from the venture to acquire the company.

Shares of Rohm & Haas dropped $1.20, or 2.17%, to close Thursday at $54.01.

Rohm & Haas is a Philadelphia-based specialty materials company. Dow Chemical is a diversified chemical company based in Midland, Mich.

CF Industries takes time for maneuver

Terra, which makes and sells nitrogen and methanol products for the agricultural and industrial markets, said Thursday that its board of directors unanimously recommends that stockholders reject the hostile takeover bid from CF Industries, a major producer and distributor of nitrogen and phosphate fertilizer products.

Deerfield, Ill.-based CF Industries has offered to acquire the outstanding shares of Terra at a fixed exchange ratio of 0.4235 of a share of CF Industries for each Terra share.

Sioux City, Iowa-based Terra said in a letter sent to shareholders that the offer is not in the best interests of the company, especially now that CF Industries is facing its own hostile takeover attempt from Agrium, a Calgary, Alta.-based agricultural product supplier and producer.

"In addition to our conclusion that CF's offer is not in the best interests of Terra and Terra's stockholders, the Terra board believes the existence of the Agrium offer makes it unlikely that CF Industries' own stockholders will grant the necessary approval for CF's proposed acquisition of Terra, presenting Terra's stockholders with what is effectively an illusory proposal," Terra said in the letter.

Agrium made its surprise bid on Feb. 25 to acquire CF Industries for $72.00 a share in cash and stock.

CF Industries had launched its hostile tender offer for Terra only two days earlier.

Agrium's proposal, which includes $31.70 in cash and one share of Agrium for each share of CF Industries, is conditioned on CF Industries' termination of its bid for Terra.

CF Industries cannot comment on Terra's recommendation to shareholders "until after our board has reviewed and responded to Agrium's unsolicited proposal," Nekvasil said in an interview Thursday.

While publicly traded companies typically provide recommendations to stockholders within 10 business days of action taking place, Nekvasil said CF Industries has no timeframe to make a decision.

"The 10-day window has become the unofficial standard but is not legally required," he said. "We don't have an announced timetable at this point."

Analysts have told Prospect News that the wind has been blown out of CF Industries' bid to acquire Terra.

"Shareholders are not going to vote for your company to buy another company if another company is trying to buy your company," an analyst said in an interview.

Terra shares lost 27 cents, or 1.07%, to close at $25.00 on Thursday.

CF Holdings' stock dropped $1.85, or 2.95%, to end at $60.89.

Shares of Agrium sank $1.40, or 4.12%, to close at $32.57.

Gevity to go private

The boards of directors of Gevity and TriNet have approved the buyout of the Bradenton, Fla.-based human resources outsourcing company.

San Leandro, Calif.-based TriNet is backed by majority investor General Atlantic, a growth equity firm with $13 billion under management.

The acquisition is subject to approval by Gevity stockholders and regulatory approval.

The companies expect the deal to close in the second quarter.

Mentioned in this article:

Agrium Inc. NYSE: AGU

CF Industries Holdings, Inc. NYSE: CF

Dow Chemical Co. NYSE: DOW

Gevity HR, Inc. Nasdaq: GVHR

Rohm & Haas Co. NYSE: ROH

Terra Industries Inc. NYSE: TRA

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