CF Industries Renews Call For Merger With Terra Industries

A three-way takeover battle in the fertilizer industry got more complicated Tuesday as CF Industries Inc. (CF) sent a letter to Terra Industries Inc. (TRA), questioning the company's purchase of 100 shares in CF stock and asking why it isn't interested in negotiating a merger agreement.

The jockeying for position, which also includes rival Agrium Inc. (AGU), comes as fertilizer producers look to take advantage of the drop in sector stock prices since last summer to buy up production capacity ahead of an expected rebound in prices.

Last month, Terra rejected CF's sweetened $3.07 billion takeover offer, saying it substantially undervalued the company. Meanwhile, CF has recommended its shareholders reject an increased hostile bid from Agrium, even though it represents a 35% premium to CF's closing price the day before the offer was made.

In Tuesday's letter, CF questioned why Terra hasn't announced the time and place of its annual meeting, which is required to be held no later than May 15, and said it continues to believe in the "compelling strategic logic" of a combination between the companies.

CF has also nominated three director candidates to Terra's board.

CF's shares were at $73.40, down 0.3%, in after-hours trading, while Terra's and Agrium's were unchanged. Terra's shares closed Tuesday at $28.85, up 1.6%, and Agrium's closed at $40.62, up 2.8%.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; [e-mail]