A lawsuit on behalf of an investor in CF Industries over the proposed $3.6Billion takeover concerning possible breaches of fiduciary duty and other violations of state law by the board of directors of CF was filed on Friday, February 27, 2009. The offer represents a premium of 30 percent over CF's closing price on February 24, 2009, and a premium of 42 percent over the 30-day volume-weighted average share price of CF, but nevertheless CF Industries shares were trading at over $160 in June, over $150 in August 2008 and over $120 in September 2008.
SeekingAlpha reports that there are 9 (!) reasons why CF Industries should reject Agrium offer and acquire Terra Industries. One of the reasons is that Agrium undervalues CF industries considering both short and long term earning power in the company. Among the other reasons SeekingAlpha points out that CF should reject the offer because Agrium has a very unhealthy balance sheet, there is a possibility that rating agencies may downgrade Agrium 's debt rating significantly if it proceeds with CF Industries's acquisition due to too much debt and CF's conservative and prudent management on the other hand does not like debt.

SeekingAlpha predicts that unlike Agrium, both CF Industries and Terra Industries have excellent balance sheets with almost no (in case of CF) or very low (in case of Terra) long term debt and they would not only withstand the current economic crisis but their combination would thrive significantly as the combination of CF Industries and Terra Industries is such an attractive deal that they would have almost 50% market share in North America and would not only outperform Agrium but would give stringent competition to the likes of Mosaic and Potash.

The Canadian fertilizer producer Agrium Inc offered to buy U.S. rival CF Industries (NYSE:CF ) for $3.6 billion offering one Agrium common share and $31.70 in cash for each CF Industries share. Agrium Inc., which reportedly held “serious discussions” with CF over a merger before CF’s 2005 initial public offering, said it has submitted a proposal to CF's board of directors, offering $72 per share, $31.70 in cash and one Agrium common share for each CF share. The offer by Agrium Inc also is conditional on CF Industries dropping its hostile offer for Terra Industries. The Agrium Inc.’s proposal comes two days after CF Industries took its all-stock takeover offer directly to Sioux City, Iowa-based Terra’s shareholders. CF Industries made an all-stock offer for Terra Industries on Jan. 15. Under the proposal, Terra Industries shareholders would have received 0.4235 of a CF Industries share for each Terra share held. On March 5, 2009 Terra Industries announced that “after careful consideration, including a thorough review of the offer with our financial and legal advisors, Terra's board of directors unanimously determined that CF's offer is not in the best interests of Terra and Terra's stockholders” and therefore rejected the $2 billion stock offer from CF.

CF Industries announced that it has submitted a slate of three nominees for election to Terra’s Board at Terra’s 2009 Annual Meeting of Shareholders. Terra commented, that Terra’s Board, with the assistance of its financial and legal advisors and after a comprehensive review, unanimously concluded that CF’s proposal does not present a compelling case to create additional value for the shareholders of either company, and that it substantially undervalues Terra on an absolute basis and relative to CF. Terra adds that many of Terra’s major shareholders have expressed to Terra their disinterest in CF’s proposal and their support of Terra’s strategy and that Terra’s Board and management remain committed to enhancing shareholder value by continuing to execute our strategic plan which we believe will deliver significantly more value to shareholders than CF’s proposal.

CF Industries Holdings Inc. board of directors rejected Agrium Inc.’s $3.04 billion hostile bid as “grossly inadequate” and said it will proceed with its own offer to buy rival fertilizer maker Terra Industries Inc. CF Industries CEO Stephen R. Wilson said in a statement that the proposed offer by Agrium is “a transparent attempt to interfere with CF Industries’ proposed business combination with Terra,” and that CF Industries is prepared to increase the value of its bid for Terra so that it would be equivalent to $27.50 a share, or $2.74 billion.

CF Industries Holdings, Inc, (CF Holdings) is a manufacturer and distributor of nitrogen and phosphate fertilizer products in North America. Shares of CF rose 20% in premarket trading to $66.88, while shares of Agrium slipped nearly 6% to $37.96, and Terra fell 3% to $24.