By Christopher Donville Dec. 7 (Bloomberg) — CF Industries Holdings Inc. increased its offer for rival Terra Industries Inc. to about $4.58 billion as it seeks to end an almost 11-month pursuit of the nitrogen- fertilizer maker. The bid of $36.75 in cash and 0.1034 of a CF share for each share of Terra includes the $7.50 a share dividend Terra declared in September, Deerfield, Illinois-based CF said today in a statement. CF’s previous offer was $32 in cash and 0.1034 of a CF share and also included the dividend. CF has sought to acquire Terra since January while fending off a hostile bid from Agrium Inc. At stake in the three-way battle is whether Agrium or CF will become the world’s second- largest publicly traded maker of nitrogen-based fertilizers after Yara International ASA of Norway. Terra has rejected CF’s previous offers as inadequate. “CF has been willing to raise its bid several times now, and with nitrogen prices rising, Terra is likely to argue that the increase in the offer simply reflects better near-term earnings visibility,” Mark Connelly , an analyst at Sterne Agee & Leach Inc. in New York, said today in a note to clients. Prices for granular urea and other nitrogen-based fertilizers have advanced since the end of October amid advancing corn prices and speculation farmers are more willing to buy crop nutrients to boost yields. Offer Premium Today’s offer represents an 18 percent premium to Terra’s closing share price on Dec. 4. Terra rose $2.44, or 6.3 percent, to $41.49 at 11:21 a.m. in New York Stock Exchange composite trading . The shares have more than doubled this year. CF fell 14 cents to $88.41. Agrium climbed C$1.99, or 3.3 percent, to C$62.97 in Toronto Stock Exchange trading . CF’s latest offer for Terra comes less than a month before the expiration of its $2.5 billion of deal financing arranged by adviser Morgan Stanley. Terra confirmed in a statement that it had received the revised proposal and said the company would review it. To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net .
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CF Industries Increases Offer for Rival Terra Industries to $4.58 Billion
