TORONTO (miningweekly.com) - Iowa-based Terra Industries has rebuffed a sweetened buyout proposal from US fertiliser producer CF Industries, leaving the way open for Canadian rival Agrium to pursue its takeover bid for CF.

When it launched its offer for CF, Agrium said the transaction was conditional on the firm dropping its plan to buy Terra Industries.

In a letter sent to CF on Wednesday, Terra chairperson and CEO Michael Bennett said the company has "carefully considered" the firm's latest proposal.

"Our board has unanimously concluded that this most recent version of your proposal continues to run counter to Terra's strategic objectives, substantially undervalues Terra both absolutely and relative to CF, and would deliver less value to our shareholders than would owning Terra on a standalone basis.

"Accordingly, we reject your proposal."

On Monday, CF said that the $3,6-billion offer from Calgary-based Agrium was "grossly inadequate" and "opportunistic".

At the same time, the company offered to improve the terms of its proposal to Terra, and said it would agree to an exchange ratio based on $27,50 for each Terra share.

The company also indicated it would be prepared to structure the deal so that approval was not required from its own shareholders.

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