Terra Industries rejects sweeter bid from rival CF

TORONTO/NEW YORK (Reuters) - Fertilizer maker Terra Industries Inc (TRA.N: Quote, Profile, Research) rejected a sweetened $4.1 billion takeover bid from rival CF Industries Holdings Inc (CF.N: Quote, Profile, Research) on Wednesday in the latest twist in a takeover battle going on since January.

CF on Sunday offered $32 in cash and 0.1034 of a share of CF common stock for each Terra share. At Tuesday's close, the bid valued Terra at $40.83 per share. The bid includes a special dividend of $7.50 a share that Terra plans to pay.

CF's revised offer, when it was announced, was about 5 percent higher than its previous all-stock bid of 0.465 CF share for each Terra share.

Terra said its board had reviewed CF's latest proposal and unanimously rejected it as inadequate.

Sioux City, Iowa-based Terra said the proposal continues to undervalue its near-term and long-term prospects. It called the offer opportunistic and said it was not in the best interests of Terra and its shareholders.

CF itself is trying to fend off a hostile takeover bid from Canadian fertilizer maker and agricultural products retailer Agrium Inc (AGU.TO: Quote, Profile, Research).

Agrium (AGU.N: Quote, Profile, Research) on Wednesday reported a 93 percent plunge in its third-quarter profit, largely due to lower prices and margins on crop nutrient sales.

In a separate statement, CF said on Wednesday it had made a "full, fair and compelling offer" that gave shareholders certainty of value and closing.

CF has put a slate of three directors up for election at Terra's annual meeting later this month.