UPDATE:CF Sweetens Terra Bid, Urges Rejection Of Agrium Offer

(Adds information from Terra proxy filing, updates premarket quotes.)

   DOW JONES NEWSWIRES 
 

CF Industries Holdings Inc. (CF) sweetened its all-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.

Earlier Monday, Terra asked its shareholders to reject CF's board nominees for the board, saying CF's previous proposal to acquire the company runs counter to Terra's strategic objectives and would deliver less value to Terra's stockholders compared with Terra as a stand-alone basis. A Terra representative wasn't immediately available to comment on the raised offer.

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 shares gained 6.8% in premarket trading Monday to $28.40 while CF added 0.9% to $68.30 and Agrium gained 4% to $37.70.

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

(Ingrid Pedrick Lehrfeld contributed to the story.)