Terra Industries forecast a huge jump in underlying earnings next year - to nearly 40% above the level Wall Street is expecting – as it rejected CF Industries' fourth bid attempt as "inadequate and opportunistic".

The nitrogen fertilizer specialist, citing the "particularly the strong fundamentals for nitrogen demand in the US agricultural business in the coming growing season", forecast revenues jumping by one quarter in 2010.

Profits - as measured by earnings before interest, tax, depreciation and amortisation (ebitda) – would hit $694m, Terra said, reflecting "robust" operating margins and noting low prices of natural gas, a key raw material for nitrogen groups.

Analysts have estimated Terra's 2010 ebitda at $506m.

Terra was "well positioned to take advantage of an upsurge in demand… as the economic recovery continues", chief executive Michael Bennett said, dismissing CF's latest bid, which was earlier this week raised by about $190m to $4.1bn.

"CF's latest proposal fails to appropriately value Terra's world class assets, strategic advantages and prospects," he said.

Question of price?

However, Terra chairman Henry Slack left the door open to a deal at better terms than the $40.83 a share offered by CF at Wednesday's share prices.

The group said that combining its estimates with earnings multiples that CF has claimed to be offering came up with a figure of $51.55 a share using data for the coming year, and $57.74 for historic ebitda.

Even the higher figure would "still be substantially accretive to CF".

Key meeting

CF, saying that it had made a "full, fair and compelling offer", set the stage for scramble for investor support by sticking by hopes for swinging the deal through electing candidates to the Terra board.

The fertilizer generalist, which owns about 7% of Terra, hopes to get three nominees elected at the Terra annual meeting on November 20.

"CF Industries is confident that Terra stockholders will show their support for its offer by voting for CF Industries' three highly-qualified, independent nominees," the group said.

Shares in CF stood $0.05 lower at $85.38 in early deals in New York.

Terra stock was 3.3% higher at $36.04, a 12% discount to CF's bid.