UPDATE 2-Fertilizer maker Mosaic to buy back $2 billion in stock

Mon Dec 9, 2013 11:30am EST
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By Rod Nickel

Dec 9 (Reuters) - U.S. fertilizer company Mosaic Co said on Monday that it would buy back about 10 percent of its outstanding stock in a roughly $2 billion purchase from the Margaret A. Cargill Foundation and the Anne Ray Charitable Trust over the next eight months.

Long anticipated by investors, the transaction with the so-called MAC Trusts could underpin a stock that has fallen about 18 percent this year as overseas demand dried up for the company's phosphate and potash fertilizer products. It also eases speculation that Mosaic might be a takeover target with a large number of shares in play.

In late-morning trading, however, Mosaic shares slipped 1 percent in New York to $46.31, touching a one-month low.

"I'm surprised a bit that the stock is trading off," said Rob Stabile, portfolio manager at LDIC Inc, which owns about 90,000 Mosaic shares on behalf of clients. "Because there's uncertainty about the price, I guess (that's) weighing on it.

"I still think net-net it's going to be a significant positive move for shareholders."

The stock weakness may reflect the delayed timetable for buying back the stock, as well as the deal removing a positive catalyst for Mosaic shares, said Scotiabank analyst Ben Isaacson in a note.

Cargill Inc in 2011 announced plans to split off its 64 percent stake in Mosaic under a series of agreements with the agribusiness' shareholders, including charitable trusts. Restrictions on the trusts and other stockholders transferring those shares expired on Nov. 26.   Continued...