CF boosts takeover bid for Terra

Terra Industries Inc. climbed the most in almost eight months in New York trading after rival fertilizer maker CF Industries Holdings Inc. boosted its takeover bid to about $4.05 billion and added a cash portion.

Terra rose $2.32, or 7.3 percent, to $34.09 at 10:17 a.m. in New York Stock Exchange composite trading. The Sioux City, Iowa-based earlier increased as much as 9.4 percent, the biggest intraday gain since March 3.

CF, seeking to become the second-largest publicly traded nitrogen-fertilizer maker after Yara International ASA, offered $32 in cash and 0.1034 of a CF share for each share of Terra yesterday, or the equivalent of $40.61 per share, based on Oct. 30 closing prices. The previous offer was for 0.465 CF share for each Terra share, or about $3.86 billion.

"Terra never liked the lack of a cash component in CF's previous offers," Edlain Rodriguez, an analyst at Broadpoint AmTech in New York, said today in an interview. "This will make it much tougher for Terra to say no."

The cash portion of the offer included the $7.50 per-share special dividend Terra previously declared, said CF, which also is the focus of a takeover bid from Agrium Inc. Morgan Stanley is acting as an adviser to CF and agreed to provide $2.5 billion of financing for the offer, CF said.

Terra, which has rejected CF's previous offers as inadequate, said yesterday it would review the latest proposal.

"The substantial cash in our offer makes the combination far more accretive for CF Industries stockholders, while providing certainty on value and closing for Terra stockholders," CF Chief Executive Stephen R. Wilson said in the statement.

Deerfield, Illinois-based CF rose 97 cents, or 1.2 percent, to $84.22. The shares climbed 69 percent this year before today.

Calgary-based Agrium gained C$1.71, or 3.4 percent, to C$52.05 in Toronto.