CF Industries (NYSE: CF - News) upped the ante for its takeover target, while staving off a hostile bid of its own.

According to Reuters, Terra Industries (NYSE: TRA - News) said that CF Industries' prior all-stock offer wouldn't be approved by CF shareholders. In response, CF came back with cash, upping its hostile bid for Terra to $32 in cash, including dividend obligations, and a little over a tenth of a share of CF common stock for each Terra share. The total worth of the cash and stock combination is $40.61 per share, though it stands to fluctuate depending on CF's stock value while Terra considers the offer.

Meanwhile, also according to Reuters, CF Industries is trying to avoid its own hostile takeover by Agrium (NYSE: AGU - News).

It will be interesting to track the Agricultural Chemical and Fertilizer Stocks Index as developments evolve. Today, Terra is trading higher by more than 5%, not quite erasing its -6.6% its -6.6% decline last week.

In the past five sessions, only China Green Agriculture (NYSE: CGA - News) and Intrepid Potash (NYSE: IPI - News) have underperformed Terra. Both are down by more than -7% for the period.

Meanwhile, MLP Terra Nitrogen Company (NYSE: TNH - News) and Newport Beach, California-based chemical company American Vanguard (NYSE: AVD - News) were the only components of the segment to stay positive last week.

As of the most recent SEC filings, Monsanto (NYSE: MON - News) and Potash of Saskatchewan (NYSE: POT - News) were the most popular fertilizer plays among professional money managers. With third-quarter 13F filings due by the middle of the month, it will be interesting to see which Pros added stakes in the fertilizer sector, and which moved their money elsewhere. George Soros was among the Pros to hold both of these stocks among his top-15 U.S.-listed positions at the end of Q2.

As of this writing, the Agricultural Chemical and Fertilizer Stocks Index is one of the 35 cheapest tickerspy Indexes by P/E ratio with a multiple of just 13.9.

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