Fertilizer War Rages: CF, Terra, Agrium

NEW YORK (TheStreet) -- CF Industries(CF Quote) said Tuesday that its investment bank, Morgan Stanley(MS Quote), will extend the deadline on its acquisition financing to Dec. 31, as the fertilizer maker continues to pursue its hostile takeover bid for rival Terra Industries(TRA Quote).

The extension on the funding, previously set to expire Nov. 30, was expected. Deerfield, Ill.-based CF, which successfully pushed three sympathetic directors onto Terra's board last month, has faced a defiant Terra. For its part, Terra, of Sioux City, Iowa, has refused to negotiate with its suitor, at least until CF brings a better price to the table. The Morgan Stanley financing comprises a $2.5 billion loan, which would cover more than 78% of the cash portion of CF's current offer. The bid calls for CF to pay $32 in cash and 0.1034 CF shares for each of the 99.83 million Terra shares outstanding.

CF continued in its attempt to apply pressure to Terra, saying in the press release announcing the extension that "it does not have any right to extend the financing commitments beyond December 31 unless a merger agreement with Terra is signed by that date."

Also in the press release, CF's chief executive, Stephen Wilson, said the vote at Terra's annual meeting signaled that its shareholders "want a sale of Terra in the near term and that the price we have offered forms the basis for final negotiations." He went on, "This has been confirmed to us in recent conversations with Terra stockholders. We are committed to moving forward with the acquisition of Terra."