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UPDATE 2-Terra rejects sweetened bid from rival CF

Published: 04 Nov 2009 05:41:26 PST

* Terra calls CF offer inadequate and opportunistic

* Says offer not in best interests of its shareholders (Adds details, background)

TORONTO/NEW YORK, Nov 4 - Fertilizer maker Terra Industries Inc rejected a sweetened $4.1 billion takeover bid from rival CF Industries Holdings Inc on Wednesday in the latest twist in a takeover battle going on since January.

CF on Sunday offered $32 in cash and 0.1034 of a share of CF common stock for each Terra share. At Tuesday's close, the bid valued Terra at $40.83 per share. The bid includes a special dividend of $7.50 a share that Terra plans to pay.

CF's revised offer, when it was announced, was about 5 percent higher than its previous all-stock bid of 0.465 CF shares for each Terra share.

CF itself is trying to fend off a hostile takeover bid from Canadian fertilizer maker and agricultural products retailer Agrium Inc.

Terra said its board had reviewed CF's latest proposal and unanimously rejected it as inadequate.

Sioux City, Iowa-based Terra said the proposal continues to undervalue its near-term and long-term prospects. It called the offer opportunistic and said it was not in the best interests of Terra and its shareholders.