(Includes Terra response, updates stock price)

CF Industries Holdings Inc. (CF) announced it has bought a 7% stake during the past two weeks in fellow fertilizer maker Terra Industries Inc. (TRA) as it sent a revised merger agreement with its latest offer, valued at about $3.9 billion.

The announcement is the latest move in a three-way struggle 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 $3.7 billion takeover attempt by Agrium Inc. (AGU). The industry is under strong pressure to consolidate after prices plunged from last year's highs.

CF's latest offer is turning each share of Terra into 0.465 CF share. That ratio would be adjusted after Terra pays its planned $7.50 a share special dividend announced Thursday. CF said in early August it was prepared to raise its bid to 0.465 share from as much as 0.4539 share.

The latest bid values Terra at $39.19 a share, an 11% premium to Friday's closing price.

Terra said in a brief statement Monday afternoon it would review the agreement. But the company last month rejected to 0.465-share bid.

Meanwhile, CF said the 7% stake, purchased for $247 million, demonstrated its commitment to a deal with Terra.

CF shares were up 1.3%, to $85.37 in recent trading, while Terra rose 1.7%, to $35.80.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com