Terra Industries Inc. urged shareholders Monday to re-elect its board of directors and reject three people nominated by rival CF Industries Holdings Inc., which has mounted a takeover bid.
The fertilizer maker also criticized a report by proxy advisory firm RiskMetrics Group, which recommends electing CF's nominees, as "fundamentally flawed." The board election is scheduled for Terra's annual meeting on Nov. 20.
Terra has been fighting off a buyout attempt by Deerfield, Ill.-based CF and rejected CF's latest unsolicited takeover offer on Nov. 4. CF had offered $4.1 billion, but Terra said that was inadequate. CF has made five offers for Terra since mid-January.
The fertilizer industry has seemed ready for consolidation as prices fell because demand suffered during the downturn.
In a letter to shareholders Monday, Terra wrote: "Do not let CF take control of Terra without paying full and fair value."
Terra urged stockholders to support its "highly qualified and experienced independent directors," saying three proxy advisory firms _ Proxy Governance Inc., Egan-Jones Proxy Services and Glass Lewis & Co. _ had recommended voting for them.
The company said a report by RiskMetrics Group that recommended shareholders elect CF's nominees "employs convoluted and contradictory reasoning to reach a fundamentally flawed conclusion."
Terra said the firm conceded that CF's proposal is inadequate, yet still recommended shareholders elect CF's nominees. It also said RiskMetrics used "flawed analysis" to calculate a premium and miscalculated historical trading multiples, among other things.
A RiskMetrics spokeswoman declined to comment.
In afternoon trading, Terra shares slid 8 cents to $37.66. CF shares rose $1.01, or 1.3 percent, to $81.37.