The bid battle between three North American fertilizer giants has heatred up, with CF Industries reworking its bid for Terra Industries after rebuffing a $3.6bn offer from Canada's Agrium.

CF Industries, the Illinois-based fertilizer group, revealed it had at a meeting on Friday rejected Agrium's cash-and-stock bid as "grossly inadequate" and "opportunistic".

The approach was a "transparent attempt to interfere" with CF Industries own $2.7bn plans to buy Iowa-based Terra Industries, the statement said, an allegation Agrium denied in a statement saying it remained "committed" to winning its takeover.

CF Industries added that it was prepared to tweak the terms of this offer to persuade the Terra board to reverse its opposition to the deal. Rather than offering a flat rate of 0.4252 CF Industry shares per Terra share, it would alter the exchange ratio to within a range of 0.4129 and 0.4539 shares with the aim of ensuring Terra investors $27.50 of value per share.

"The $27.50 per share represents an almost 70% premium to Terra's stock price before we made our offer, while peer group stock performance has been essentially flat since that time," CF industries said.

Shareholder vote bypassed

CF Industries also said that it was prepared to pay for the deal in a mixture of ordinary shares and a special tranche of preferred stock in order to avoid triggers which would require it to hold a meeting of its shareholders.

In a letter to Terra, it said: "You raised the issue of whether, given Agrium's proposal, CF industries will be able to obtain stockholder approval... to issue common stock.

"While we are confident that the CF Industries stockholders will support a business combination with Terra, we are prepared to address the issue... by structuring the transaction so that a vote by the CF Industries stockholders will not be required."

'Far superior alternative'

However, Agrium said that CF Industries proposal to bypass shareholders was a sign that they would prefer their company became prey rather than predator.

"It appears that CF's board and management concluded that stockholders would choose Agrium's offer over CF's proposed Terra acquisition and, as a result, decided to use an unusual non-voting security to deny their own stockholders a voice in this critical decision," Agrium said.

"We believe that CF stockholders view receiving a substantial premium from Agrium as a far superior alternative to paying a large premium to Terra stockholders."

CF Industries shares stood $0.97, or 1.6%, higher at $61.56 in afternoon trade in New York, with Terra stock down $1.11, or 4.3%, at $25.00.

Agrium shares were $1.12, or 3.6%, higher at $32.55.