(RTTNews) - Wednesday, Terra Industries Inc. (TRA: News ) once again unanimously brushed aside CF Industries Holdings, Inc.'s (CF: News ) latest proposal to acquire Terra for the equivalent of $24.50 in cash and 0.1034 of a share of CF common stock, indicating the proposal as inadequate, opportunistic and not in the best interests of Terra and its shareholders. CF Industries' latest proposal equals the net value of CF's announced offer of $32.00 that will be reduced by Terra's previously declared $7.50 per share special cash dividend

On November 1, CF Industries sweetened its offer to $32.00 in cash and 0.1034 of a share of CF common stock for each Terra share, valuing Terra at $40.61 per share or about $4.1 billion. The offer includes the $7.50 per share special dividend declared by Terra. In its offer, CF has included an 80% cash component this time, with only about less than 20% in stock.

The Sioux City, Iowa-based Terra said that CF's presentation justifies its inadequate proposal using a 2010 EBITDA estimate for Terra of $525 million, which is in fact significantly less than Terra's projection of about $694 million.

Further, the company said that using CF's own proposed multiple of 6.7x1 Terra's projected 2010 EBITDA would indicate an enterprise value of $4.65 billion. Applying CF's own adjustments, this would imply an equity value of $51.55 per share for Terra.

Alternatively, using CF's mean NTM EBITDA industry acquisition multiple of 7.6x2 would imply an enterprise value of about $5.27 billion for Terra, which equates to $57.74 per share, a price which would still be substantially accretive to CF.
Another reason for the rejection of CF's proposal was that it undervalues Terra's ability to continue to make strategic and opportunistic acquisitions that build shareholder value, such as Terra's pending acquisition of a 50% interest in Agrium Inc.'s (AGU, AGU.TO ) Carseland nitrogen manufacturing facility and its acquisition of Mississippi Chemical Corp.

The company noted that its track record of delivering value to its shareholders in the form of stock buybacks and dividends, which have amounted to over $1.0 billion over the last four years, including the $750 million to be paid to all Terra shareholders in December as a $7.50 per share special dividend.

The company said that after considering all these factors, the board rejected CF's latest proposal. However, the company said it is open to considering any bona fide opportunity to create meaningful value for Terra shareholders.

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