Terra Gives Weak 3Q View, Launches $600 Million Debt Sale

   DOW JONES NEWSWIRES 

Terra Industries Inc. (TRA) projected third-quarter results below analysts' expectations amid lower sales volumes and prices.

The fertilizer company also launched its previously announced plan to sell $600 million of 10-year senior notes in a private offering for purposes including debt repayment and a special dividend.

Terra anticipates third-quarter revenue of about $347 million, down 56% from a year earlier, with operating earnings falling 59% to $54.2 million. The mean estimates of analysts surveyed by Thomson Reuters were for operating income of $101.3 million and revenue of $359.3 million.

Terra has been involved in the prolonged three-way turf war between CF Industries Holdings Inc. (CF) which is bidding for Terra, and Agrium Inc. (AGU), which in turn has its sights on CF. CF repeatedly has rejected Agrium's approaches in favor of a deal for Terra.

The fertilizer industry has been struggling since the commodities boom turned bust last year.

Separately, Terra agreed to acquire roughly half of Agrium's Carseland nitrogen facility for $250 million if Agrium completes it acquisition of CF and Terra raises the $600 million. Agrium said it believes the deal would address Canadian regulatory concerns related to any takeover of CF.

Agrium President and Chief Executive Mike Wilson said the move will allow it to keep moving forward with its bid for CF, and urged CF to begin meaningful discussions regarding its offer. Agrium extended its offer to acquire CF until 12 midnight EST Nov. 13. As of 5 p.m. Friday, about 9.1 million CF shares had been tendered and not withdrawn. CF has about 49 million shares outstanding.

Terra in September said it would pay its shareholders up to $750 million in a special dividend and planned to raise up to $600 million.

Terra shares closed Friday at $36.36, while Agrium was at $53.34 and CF at $90.63. None traded premarket.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail];