UPDATE 3-Top proxy adviser backs CF slate for Terra's board

* RiskMetrics backs CF slate of directors for Terra board

* Terra shareholders to vote on Nov. 20

* Terra shares close 7.2 pct higher on NYSE
(Adds Terra statement, updates share price)

NEW YORK, Nov 13 (Reuters) - Top proxy advisory firm
RiskMetrics Group on Friday recommended Terra Industries Inc
(TRA.N) shareholders elect a dissident slate of directors
backed by rival CF Industries Inc (CF.N).

Terra shares rose after the recommendation and closed up
7.2 percent on the New York Stock Exchange.

Fertilizer maker CF launched a hostile bid for Terra in
January and has placed a slate of three directors up for
election at Terra's annual meeting next week.

"We believe the Terra board has been provided with adequate
time and sufficient negotiating leverage (and will continue to
be provided with additional time and enjoy continued
negotiating leverage) to extract the highest value available
for Terra shareholders," RiskMetrics wrote in the report.

Terra's annual meeting is scheduled for Friday, Nov. 20. A
vote in favor of the dissident slate could significantly
improve CF's chances of buying Terra.

RiskMetrics' recommendations have had a strong role in
deciding which deals win investor approval and, in some cases,
have been influential in obtaining higher deal prices for
shareholders.

The RiskMetrics report is in conflict with recommendations
by two other proxy advisers released earlier this week. Those
firms -- Proxy Governance and Egan Jones -- both backed the
Terra slate.

"We strongly believe that RiskMetrics reached the wrong
conclusion in failing to recommend that shareholders re-elect
Terra's highly-qualified and independent directors," Terra said
in a statement. "Our opinion remains that CF's proposal is
inadequate and opportunistic."

CF has offered Terra shareholders $24.50 in cash and .1034
CF shares for every Terra share. Terra shareholders will also
receive a $7.50 special dividend, regardless of whether Terra
reaches a deal teal with CF.

The current value of the bid is $32.80 without the dividend
and $40.30 with the dividend. Terra shares are currently
trading at $37.74.

Terra has repeatedly rejected CF's overtures, saying the
company's bid is too low.

CF is itself fending off a hostile takeover bid from
Canada's Agrium Inc (AGU.TO). Agrium raised its bid for CF by
$5 last week, and its tender offer for CF shares expires on
Nov. 18, two days before the Terra vote.
(Reporting by Michael Erman; Editing by Gerald E. McCormick,
Gary Hill and Matthew Lewis)