CF rejects Agrium's sweetened proposal

TORONTO (Reuters) - U.S. fertilizer maker CF Industries (CF.N: Quote, Profile, Research) said on Friday its board rejected rival Agrium Inc's (AGU.TO: Quote, Profile, Research) sweetened bid worth about $4.5 billion, arguing the proposal substantially undervalues the company.

CF has been fending-off Agrium's hostile bid since February, as it pursues its own hostile bid for smaller U.S. rival Terra Industries (TRA.N: Quote, Profile, Research).

On Thursday, Agrium raised the cash portion of its bid by $5 per share to $45 plus one Agrium share for each CF share. This implies a deal value of $92.99 per CF share based on Agrium's closing stock price on November 4.

But the bump in the offer failed to impress CF's investors, who were expecting a much bigger increase. CF shares fell sharply on Thursday as investors bet on the improved prospects of a deal between CF and Terra.

On Wednesday, Terra rejected a sweetened bid from CF, which has nominated a slate to Terra's board. A victory for the CF slate, which is slated to be voted upon on November 20, would likely help clinch a deal with Terra.

CF shares were up 41 cents to $79.90 in premarket trading.

(Reporting by Euan Rocha; Editing by Derek Caney)