Terra Industries boss Michael Bennett has, for a fifth time, rejected the overtures of rival CF Industries, saying that the latest approach is shrouded in "enormous uncertainty" because of the ambitions of another fertilizer group, Agrium.

Mr Bennett said that the latest $3.8bn offer from CF boss Stephen Wilson failed to "appropriately value Terra", either on an absolute basis or relative to CF.

And even that price may be "inflated", given that CF faces its own bid, from Canada-based Agrium. This offer may have added a bid premium the price of the CF stock with which Mr Wilson is attempting to buy Terra.

"The actual value of CF's offer could be significantly lower than current trading prices would indicate."

'Lacks industrial logic'

Furthermore, CF shareholders "are likely to prefer an Agrium transaction if given a choice", Mr Bennett said.

Mr Wilson has attempted to bypass a shareholder vote in his bid strategy of rejecting Agrium and snapping up Terra.

Mr Bennett added: "Over the last nine months, our Board has reviewed five proposals from CF – and each time the board has unanimously determined that a combination of our companies lacks compelling industrial logic and runs counter to Terra's strategic objective."

His rejection paves the way for a battle at Terra's annual meeting next month, when CF is attempting to get three of its nominees voted onto Mr Bennett's board.

CF on Monday revealed it had spent $247m buying a 7% Terra stake.

Market reaction

CF shares closed $2.03 lower at $84.20 in New York, value its Terra bid at $39.15 a share.

Terra shares closed up $0.18 at $34.85, an 11% discount to the bid.