UPDATE: Terra Again Says No To CF Industries' Takeover Effort

   (Adds CF statement) 

Terra Industries Inc. (TRA) said no to CF Industries Holdings Inc.'s (CF) latest merger agreement submitted earlier this week, saying the bid - first disclosed two months ago - still sharply undervalues the fertilizer maker.

"Over the last nine months, our board has reviewed five proposals from CF - and each time the board has unanimously determined that a combination of our companies lacks compelling industrial logic and runs counter to Terra's strategic objectives," Terra President and Chief Executive Michael Bennett said Thursday.

Monday's merger-deal submittal by CF came the same day it announced it had bought a 7% stake the past two weeks in the fellow fertilizer maker. The company's latest offer, - 0.465 CF share for each Terra share - values Terra at about $3.9 billion.

The tussle is part of a three-way battle for power in the fertilizer industry. Since the start of the year, Terra has repeatedly refused offers from CF, which is the subject of a similar-sized takeover attempt by Agrium Inc. (AGU). The industry has been under strong pressure to consolidate after prices plunged from last year's highs.

Terra Chairman Henry Slack said Thursday that Agrium's bid for CF makes it difficult to value CF's stock, "which we believe is inflated" because of Agrium's takeover effort. He added that Terra believes CF holders would preferred to be taken over than acquire Terra if given the choice.

CF, in a statement issued soon after Terra's, expressed confidence that "Terra stockholders will show their support by voting for" CF's nominees at Terra's upcoming annual meeting in November. CF is backing three candidates for Terra's 8-person board.

CF shares closed Wednesday at $86.23 while Terra finished at $34.67. Neither were active premarket.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; [e-mail]