Terra Industries said Wednesday it finds CF's Industries bid more favorable than Yara International's offer, but will give Yara five days to make another bid.
If Yara's deal with Terra falls apart, Yara will get a $123 million breakup fee.
In February, Terra accepted an offer from Yara to be bought for $4.1 billion. The proposed deal valued the company at $41.10 a share and was an all-cash offer. The fertilizer maker CF Industries is offering Terra $4.75 billion, comprised of $37.15 in cash and 0.0953 of CF share for each Terra share.
CF Industries has criticized Terra's plans to be bought by Yara, because Terra announced its plans to be bought by Yara only a month after CF had stopped its prolonged attempt to buy the company.
Stephen R. Wilson, CF's chairman, president and CEO, responded to Terra's response to CF's proposed bid as a "superior proposal," stating that "Any offer from Yara must be heavily discounted for the substantial risks and length of time associated with closing."
CF's bid has already been cleared by regulatory authories and the company expects it can close a deal in less than 30 days.
-Reported by David Faber