In Toronto Wednesday, Fording's shares are trading at C$32.90, up 30 Canadian cents.

In a news release, the coal producer said, "The board of directors continues to be of the view that the proposed income trust conversion announced by the company on Monday Oct. 21, is in the best interests of the shareholders and offers superior value in comparison to the offer."

Fording said it will mail the circular to shareholders later this month.

The company noted that its decision to pursue the conversion to an income trust "does not preclude other value enhancing alternatives that Fording's board and its financial advisers will continue to canvass and evaluate."

In reaching its decision and making its recommendation to reject the offer, Fording's board considered a number of factors, including:

-since the Sherritt offer and the proposed income trust conversion were announced, Fording's common shares have traded between C$30.25 and C$33.00;

-RBC Capital Markets has expressed an opinion that the offer is "inadequate" and that the proposed conversion to an income trust is "superior" from a financial point of view;

-the offer is highly leveraged and is dependent on proceeds from loan facilities and a sale of Fording's assets.

Fording said its board concluded that the offer isn't fair to shareholders, and doesn't recognize the underlying value, record of performance and future prospects of the company, and that the conversion to an income trust is superior to the offer.

The company also said "the offer contains materially inadequate disclosure regarding the offeror's plans for Fording."

The offer is conditional on a minimum of two-thirds of Fording's outstanding common shares being tendered.