• Advocate business staff
• Published: Nov 20, 2009 - UPDATED: 2:01 p.m.

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Three nominees to the Terra Industries Inc. board of directors — who were backed by fertilizer rival CF Industries — have been elected over Terra candidates, according to unofficial results at Terra’s annual meeting today.

Each company operates ammonia-based chemical plants on the Mississippi River near Donaldsonville, with CF’s being the largest in North America. For months, CF has attempted to buy Terra, a $2.9 billion-a-year company, and for months Iowa-based Terra has resisted what it describes as inadequate offers from CF Industries Holdings Inc.

Though CF doesn’t control a majority of the Terra board, the election of John Lilly, David Wilson and Irving Yoskowitz over three Terra candidates increases the odds a merger could occur, and CF — while not tipping its hand about its next strategy — isn’t backing off from the deal.

“We are pleased that Terra stockholders have voiced their support for CF Industries’ proposed acquisition of Terra by voting for all three of our director nominees,” CF Chairman Stephen Wilson said in a statement this morning. A spokesman for Wilson and CF, which had $3.9 billion in 2008 sales, wasn’t immediately available for comment.

In a recent bid for Terra, CF lined up $2.5 billion in financing with Morgan Stanley and said it would offer $32 per share for Terra stock and give Terra stockholders more than one-tenth of a share CF stock. CF claims Terra’s focus on industrial customers and CF’s focus on agricultural customers would create a $6 billion enterprise with complimentary business lines.

“CF’s latest proposal substantially undervalues Terra’s near- and long-term prospects,” Terra officials said in a statement today, though they said the board would remain open to “any bona fide opportunity to create meaningful value for Terra shareholders.”

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