Terra Industries discussed a takeover by Yara nearly two years before their $4.1bn deal unveiled two weeks ago, and had firm interest from two other suitors besides rejected bidder CF Industries.

The US nitrogen group rejected an approach from Yara in June 2008, as the global economic downturn was gathering pace, saying that it was "not convinced that it the right time" to pursue a deal.

However, the two companies continued talks into July, until Yara broke off to pursue another, unnamed, deal. Yara in July 2008 unveiled the Can$1.6bn takeover of Canada's Saskferco.

Contact resumed only after CF launched a bid for Terra in January last year, when Yara chief executive Jorgen Ole Haslestad to declare his "continued interest".

Two other bidders 

The saga of the Terra bid scrap is revealed in regulatory filings which also show that the group's chief executive, Michael Bennett, had preliminary talks with opposite numbers in "several" fertilizer companies, and signed confidentiality agreements with two.

These companies remained on the sidelines until some two months ago when, after several sweeteners by CF to its bid, both said they were no longer interested in a deal.

The filing shows that talks between Mr Bennett and Mr Haslestad resumed in earnest last October, as CF was preparing for a proxy battle which ended with it placing three nominees onto the Terra board.

However, despite several meetings and telephone conversations between the Terra and Yara camps, the Norwegian group did not make a firm bid, of $40.75 a share in cash, until January 13, the day before CF announced the withdrawal of its last offer, worth about $38.40 a share.

The document fails to clarify why Yara's bid was, at the start of this month, raised to $41.10 a share.