Fertilizer company Terra Industries said Wednesday its board favors a bid to be acquired by CF Industries instead of a previous agreement with Norway's Yara.
Terra, based in Sioux City, Iowa, has given Yara five business days to meet or beat CF's offer. Yara's $4.1 billion buyout deal was announced last month.
Chemical maker CF Industries Holdings Inc., based in Deerfield, Ill., last week offered to buy Terra Industries Inc. in a cash and stock deal valued at $4.7 billion.
"We believe that Terra is worth more to CF Industries than to any other acquirer," CF President and CEO Stephen R. Wilson said in a statement.
Yara said its board is considering how to respond. The deadline for its response is March 17 at 5 p.m. EST.
If Terra chooses the new bid from CF, Terra will owe Yara a $123 million break-up fee, according to Yara.
"We've been waiting for the Terra board to come up with its response, and now we have it," Yara spokesman Asle Skredderberget said in a telephone interview. "So, our board now has five days to decide what to do," he said.
Terra shares gained 62 cents to $46.45 in morning trading. CF shares rose 87 cents to $101.50.
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