CF Sweetens Bid For Terra, Urges Rejection Of Agrium Offer

   DOW JONES NEWSWIRES 

CF Industries Holdings Inc. (CF) sweetened its cash-and-stock bid for Terra Industries Inc. (TRA) to $3.07 billion, while recommending shareholders reject Agrium Inc.'s (AGU) approach as the three fertilizer companies look to remake the industry by their own preference.

CF initially offered to buy Terra in January in a deal initially valued at $2.1 billion. That valued Terra shares at $20, but was revised from a fixed ratio to a range that could have been both higher and lower than the initial bid. That range was unrevised in Monday's latest bid, but the per-share value to be seen by Terra holders was raised 11% to $30.50.

In a letter to Terra's board, CF Chairman and Chief Executive Stephen R. Wilson wrote that the two companies merging is the best course. He also expressed confidence that Terra shareholders will back CF's board nominees at Terra's upcoming annual meeting. CF's bid turned hostile earlier this month as the company decided to take it directly to Terra shareholders

At the same time, CF again rejected Agrium's effort to acquire CF, a deal initially valued at $3.6 billion which was made after CF's approach to Terra became public. Agrium has launched its own tender offer for CF, which is valued at $72 a share under the bid.

The jockeying for position in the industry 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 what they see as an inevitable turnaround in commodity prices.

Terra's shares closed at $26.60 on Friday. CF Industries and Agrium's shares closed at $67.68 and $36.26, respectively, on Friday. None of the three traded premarket Monday.

-By Tess Stynes, Dow Jones Newswires; 201-938-2473; [e-mail]