From Deal Journal:
When looking for hints on how a merger will turn out, never rule out the arbitragers.
Arbitragers are investors who bet on whether mergers that are announced will actually go on to completion. And, ever since fertilizer maker CF Industries announced its unsolicited $2 billion takeover offer for Terra Industries, arbs were convinced that another bidder would show up for either CF or Terra. The deal’s stakes were high — at least in the fertilizer industry — where the CF and Terra would have such high market share that some analysts were concerned it would trigger an antitrust review.
One person familiar with CF’s plans rejected the possibility of another bidder repeatedly. But, today, the arbs were vindicated as Agrium announced a $72 a share offer for CF.
The bid turned a staid fertilizer deal into a fascinating love triangle. Agrium CEO Mike Wilson urged CF to drop Terra: “We expect to achieve significant operating synergies - well in excess of those contemplated in CF’s proposal to acquire Terra Industries Inc. - and expect the combination to provide many benefits to the customers, suppliers, and employees of both Agrium and CF, as well as the communities in which both companies operate.”>>>MORE