CF Industries opened a new chapter in the Terra Industries takeover saga by reopening its pursuit of the US nitrogen group, and appearing to trump handsomely rival suitor Yara International.

Terra shares jumped 11% to their highest in nearly 18 months.

CF, which last month said it was ditching its Terra chase after a quest of nearly a year, unveiled a cash-and-shares offer valuing its Iowa-based target at $4.7bn.

The bid is higher than the $4.1bn Terra agreed with Norway's Yara earlier this month, and some $850m more than CF's previous offer, made in December, when the group said it had only "nickels and quarters" left to improve its terms.

"It is clear that CF Industries is the best acquirer for Terra given the compelling strategic benefits of the combination," Stephen Wilson, the CF chief executive.

"Our offer is superior to Terra's substantially lower, highly conditional offer."

CF has claimed its tie-up with Terra could release annual cost savings of some $130m, with Yara claiming "hard" synergies of $60m a year.

Small print

Mr Bennett said that he did "not understand" how Terra could have agreed the Yara deal without reference to CF, which last year unveiled seven separate offer proposals in an attempt to get its target to the negotiating table.

The Yara bid, which is conditional on factors including approval from Norwegian lawmakers, should be discounted for the "lengthy period" it will require to closing, making it "not higher" than CF's last offer, which was worth $38.41 a share when pitched in December.

A regulatory filing last week showed Terra's agreement for Yara's all-cash deal came nearly two years after the two companies discussed a takeover, and followed successive cautions by the Norwegian group that it would not be drawn into a competitive auction.

The filing also revealed that Yara would be obliged to pay a break fee of 3% of the deal value, equivalent to $123m, if it accepted an alternative offer.

'Evaluate terms'

Terra said it would "evaluate the terms of the CF proposal in a manner consistent with its duties under applicable Maryland law and the terms of the Yara agreement".

Terra shares closed up 10.9% at $45.67 in New York, their highest finish since September 2008, with CF stock ending down 1.0% at $106.42.

Yara shares closed down 4.4% at NKr237.70 in Oslo.