Terra won't appoint CF friendly directors

Terra Industries Inc. said RiskMetrics Group Inc.'s recommendation that shareholders elect a slate of directors backed by rival fertilizer maker CF Industries Holdings Inc. is "flawed" and "contradictory."

The Nov. 13 report by RiskMetrics, a proxy-advisory firm, "employs convoluted and contradictory reasoning to reach a fundamentally flawed conclusion," Sioux City, Iowa-based Terra said today in a statement.

Terra has been fending off a takeover attempt by CF, which itself is the target of a hostile bid from Agrium Inc. At stake is whether CF or Agrium will become the world's second-largest publicly traded producer of nitrogen-based crop nutrients after Yara International ASA of Norway.

Terra shareholders are scheduled to vote Nov. 20 on whether to support CF's nominees or a slate put up by Terra.

Sarah Cohn, a spokeswoman for RiskMetrics, declined to comment on Terra's criticism.

"The content of our report speaks for itself," Cohn said today in a telephone interview.

Terra rose 2 cents to $37.76 at 11:21 a.m. in New York Stock Exchange composite trading. Deerfield-based CF gained 2 cents to $80.38. Calgary-based Agrium increased 69 cents, or 1.2 percent, to C$56.42 on the Toronto Stock Exchange.

Of the largest 50 mutual fund companies, 43 are clients of RiskMetrics, according to the company's Web site.