NEW YORK ( TheStreet) -- CF Industries ( CF) just couldn't take it.
Like a jealous lover, the company had to stand by and watch as Norwegian fertilizer giant Yara Industries swooped in and agreed to acquire Terra Industries ( TRA), a nitrogen-fertilizer specialist that CF had been pursuing in a hostile manner for a year before ending its bid in January. According to the proxy statement filed by Terra after striking its deal with Yara last month, Terra and its Norwegian suitor had been flirting behind CF's back for almost the entire period. But on Tuesday, with CF re-upping its bid for Terra and trumping Yara's offer of $41.10 a share by 14%, the Deerfield, Ill., company has come back aggressively onto the scene. Still, Yara's deal is all-cash, a substantial check in the Norwegians' favor.
A Terra Industries fertilizer plant in Verdigris, Okla.
Terra's agreement with Yara includes a so-called "no-shop provision," which means that Terra can't solicit competing bids. Its board can only assess the latest CF offer, and then respond yea or nay. If Terra responds in the positive, Yara, under its merger pact with Sioux City, Iowa, company, has five days (technically, at least) to match or surpass the CF offer. In practice, Yara could probably take a little longer if it's indeed working on a compelling counter. Predictably, Terra shares shot higher by 10.8% Tuesday to $45.63, on volume of 35.5 million shares, more than 7 times the daily average turnover in the name. Despite the heavy trading, Terra shares closed at a discount to the new CF price.