Terra Calls CF Bid 'Superior,' Gives Yara 5 Days To Sweeten

Terra Industries Inc. (TRA) said the latest proposal by CF Industries Holdings Inc. (CF) is superior to its merger agreement with Norway's Yara International ASA (YAR.OS, YARIY), and Terra has told Yara it plans to end the agreement unless Yara can make a sweeter offer within five business days.

Terra said CF's latest bid, which came in last week valued at about $4.72 billion in cash and stock, is superior to the $4.1 billion all-cash bid it had accepted from Yara last month.

The CF bid would give Terra $37.15 and 0.0953 a share of CF common stock in exchange for each Terra share, compared with Yara's bid of $41.10.

Shares of Terra rose 1.4% to $46.45 in premarket trading, while CF dropped 0.6% to $100.

Yara said its board will evaluate the situation and whether to match CF's offer. If Yara's deal with Terra falls through, it would get a $123 million breakup fee.

Terra had fought repeated advances from CF for a year before accepting Yara's offer. When CF made its latest offer last week, Chairman and Chief Executive Stephen R. Wilson said his company's offer was "far superior" to Yara's because the CF deal could close months sooner and carries fewer hurdles to overcome before closing, such as the U.S. and European antitrust approval needed in a Yara/Terra combination.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; [e-mail];