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 share for each Terra share.
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.
CF itself is trying to fend off a hostile takeover bid from Canadian fertilizer maker and agricultural products retailer Agrium Inc.
Agrium on Wednesday reported a 93 percent plunge in its third-quarter profit, largely due to lower prices and margins on crop nutrient sales.
In a separate statement, CF said on Wednesday it had made a full, fair and compelling offer that gave shareholders certainty of value and closing.
CF has put a slate of three directors up for election at Terra's annual meeting later this month.
Analysts and investors say CF's revised bid for Terra could spur Agrium to raise its offer for CF before Terra's annual meeting.
Fertilizer is an essential ingredient for crop growth, a fact that has fueled deal interest during the past year. As world populations rise, and the amount of arable land remains relatively stable, farmers are looking to produce more food.
Additionally, the advent of genetically modified crops has created a steep demand for fertilizer, as the new seeds require even more nourishment to grow.
Terra's shares rose 12 cents to $35, while CF was up 2 cents at $85.45 in premarket trading.