CF Industries, the US fertilizer giant, revived the spectre of a showdown with takeover target Terra Industries after finding its latest sweetened offer following two previous bids into the reject pile.

CF said plans to get its own candidates onto its US rival's board through an annual meeting vote remained live, despite being thwarted initially by a Terra sidestep.

After CF early this year lodged plans to put up three of its nominees for election, Terra changed its constitution to push back from May 15 the deadline for its shareholder meeting.

Terra is legally bound, nonetheless, to hold an investor meeting this year.

"CF Industries is confident that Terra stockholders will show their support by voting for CF Industries' nominees at Terra's annual meeting, which should have been held by now," CF said.

'Deliver less value'

The comments followed the Terra board's unanimous rejection of the improved $3.8bn, all-share bid which CF lodged three weeks ago.

"This most recent version of your proposal continues to run counter to Terra's strategic objectives, substantially undervalues Terra... and would deliver less value to our shareholders than would owning Terra on a standalone basis," Terra chief executive Michael Bennett and chairman Henry Slack said a letter to CF.

CF replied that its "full and fair" offer would hand Terra investors nearly 50% of the combined company, and allow them to benefit from "real and substantial" merger benefits.

CF shares stood $0.04 lower at $82.15 in morning trade in New York, valuing its bid at $3.81bn, or $38.20 per Terra share.

Terra stock was down $0.04 at $31.81, a 16.7% discount to the bid.