Terra Industries Inc. |TRA
CF Industries Holdings Inc. |CF

Deal value $4.1 billion

Spread 11/24/09 $1.20, or 3.3%

Terra Industries Inc. shareholders voted in the dissident slate of directors put up by CF Industries Holdings Inc. in support of CF's unsolicited proposal to acquire Terra.

The three directors on CF Industries' proxy would have joined an eight-­member staggered board, but Terra responded by expanding its board to 11 members to retain directors that were not voted in at the annual meeting. The class up for election at the 2010 annual meeting consists of two directors, but the reinstated slate may also require ratification by shareholders.

The CF slate won with about 44.5% of the vote, while 35% cast ballots in favor of the incumbent Terra nominees. Since CF owns 7% of Terra, the vote of shareholders not affiliated with the CF offer in favor of its dissident slate had only a 2.5% margin. Nevertheless, CF won the solicitation, and historically, if a hostile bidder succeeds in placing directors on a target board, the company ends up selling -- if not always to the hostile bidder.

Terra's statements during the close of the protracted proxy fight suggest that the company is looking for the best sale price. Terra says "current trends in the fertilizer market could provide potential consolidation opportunities for many market participants."

Agrium Inc.'s spoiler unsolicited bid for CF Industries expired on Nov. 18, and 62% of CF shareholders tendered to the offer. Agrium termed that result strong support and extended the offer to Dec. 18.

Landry's Restaurants Inc. |LNY
Tilman Fertitta

Deal value $240 million

Spread 11/24/09 $-6.36, or -30.1%

Pershing Square Capital Management LP has stepped into the proposed $1.2 billion buyout of Landry's Restaurants Inc. Tilman Fertitta, Landry's chairman and founder, launched a revived effort to buy the restaurant and gaming operation. He held 55% of the shares on Nov. 3 at $14.75 per share, or $240 million.

Fertitta tried to buy Landry's in 2008, but that deal is under litigation in Delaware Court of Chancery over whether the special committee for Landry's failed shareholders by letting him walk from a $15 million termination fee and from the deal itself.

The Landry's board also let Fertitta buy up shares to gain a majority while the buyout pended.

Pershing has frequently taken stakes in retail companies with real estate asset support. The fund also typically uses a swap structure to leverage its position. Under the cash-settled swaps, Pershing does not have voting rights for the 14.9% of Landry's it has an economic interest in, but typically the counterparties to a swap trade would vote in keeping with economics of the trade.

Is Pershing's bet right that Fertitta is buying the company on the cheap?

The Fertitta deal is conditioned on the approval of a majority of the minority shareholders, which under the agreement is designed to address shareholder objections and is unwaivable.

The Pershing Square stake, including the swap portion, is enough to block the buyout agreement.

The deal could also be affected by the ongoing litigation in Delaware over the conduct of the special committee during the previous buyout attempt.