CF Industries Holdings Inc. (CF) on Tuesday resumed its pursuit of rival fertilizer maker Terra Industries Inc. (TRA) with a $4.72 billion offer that seeks to break up the agreed bid from Norway's Yara International ASA (YARIY, YAR.OS).

Terra had fought a year-long pursuit from its U.S. rival before accepting Yara's all-cash $4.1 billion bid last month, which includes a $123 million break-up fee.

Rising commodity prices have sparked a flurry of deals in the crop-nutrient sector in recent weeks, and Terra's focus on nitrogen-based products has kept it among the most attractive operators. CF Industries is still defending itself against a hostile offer from Canada's Agrium Inc. (AGU).

Terra shares have traded above the $41.10 offered by Yara, fueling speculation that CF Industries would return with a higher offer. Terra shares were up 12% at $46.02 in recent trading while CF was down 3.7% at $103.57.

CF Industries boosted its offer several times before dropping its pursuit in January, and has returned with more cash and additional financing, with Bank of Tokyo-Mitsubishi UJ joining Morgan Stanley to back the proposed bid. CF is offering $37.15 in cash and 0.0953 of its own shares for each Terra share, valuing its target at $47.40, based on Monday's closing price. Its most-recent bid was $36.75 and 0.1034 of a share.

CF Industries Chairman and Chief Executive Stephen R. Wilson said in a statement: "It is clear that CF Industries is the best acquirer for Terra" based on the "substantial synergies" the two firms can only achieve together.

"We withdrew our prior offer because we believed that Terra was unwilling to agree to a sale," he said. "Now that Terra is for sale, we have made an offer that is superior to Yara's substantially lower, highly conditional offer." CF said their offer will boost earnings in the first year.

Yara aimed to close the Terra deal by the end of the second quarter, subject to shareholder and regulatory approval--including the Committee on Foreign Investment In The United States--as well as the successful execution of the rights issue.

Terra said its board will evaluate the proposal and won't comment on it before then. Its agreement with Yara may be terminated if it receives a superior proposal, although Yara would be entitled to a $123 million break-up fee. Yara has five days to respond about matching the CF bid. Yara wouldn't comment on the offer Tuesday.

Yara is already one of the world's largest fertilizer producers, and Terra is prized as a U.S. focused pure-play on nitrogen-based products with an expanding industrial unit complementing its agribusiness interests.

The global fertilizer market is recovering from a two-year boom-and-bust, triggering a series of efforts to tap improving supply and demand conditions. Nitrogen prices have been far more resilient than those for phosphate and potash, which are also used to produce crop nutrients.

-By Doug Cameron and Joan Solsman, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com