January 16, 2018 / 11:37 AM / a year ago

UPDATE 1-Israel Chemicals up after Nutrien stake sale details end uncertainty

(Recasts with resumption of share trading, details, adds analyst comment)

By Steven Scheer

JERUSALEM, Jan 16 (Reuters) - Shares in Israel Chemicals (ICL) rose in Tel Aviv trading on Tuesday after Canada’s Nutrien said it would sell its 13.8 percent stake in the firm, removing uncertainty about plans for the sale that had weighed on the stock.

Trading had been halted for about 40 minutes. Once they resumed ICL’s shares dropped more than 1 percent before rebounding to trade up 5.4 percent. By midsession, the shares were trading up 1.9 percent at 15.41 shekels.

“The fog is gone. There is no more short-term pressure on the stock,” said Ilanit Sherf, an analyst at the Psagot brokerage. “There is (now) a short squeeze in the share.”

Nutrien said it planned to sell its 176 million shares in ICL, a top global supplier of potash, in a private secondary offering that was expected to close on Jan. 23. It expects net proceeds of about $700 million from its sale, implying a sale price of 13.5 shekels per share.

A source close to the deal said the shares had already been sold through UBS and more than half the buyers were Israeli institutional investors.

Nutrien was formed from the merger of Agrium Inc and Potash Corp of Saskatchewan but regulators in China and India required Potash to divest minority stakes in ICL, SQM and Arab Potash Co PLC to approve the $25 billion deal.

Sherf said ICL’s shares had been underperforming their peers, largely because of the uncertainty of when and how the shares would be sold.

“Nobody wanted to touch the stock,” she said. “People were waiting to see what would happen with the Potash stake.”

Potash Corp of Saskatchewan bought its stake in ICL in 1998. In 2011, it sought to buy 25 to 100 percent of ICL, which has potash and phosphate mining rights on state-owned land, primarily the Dead Sea, but the government rebuffed its efforts and it dropped its bid in 2014.

ICL was hit by a sharp drop in potash prices. Although its shares are up 7 percent so far in 2018, they fell 11.7 percent in 2017.

ICL, with a market value of 19.4 billion shekels ($5.7 billion), is 46 percent held by conglomerate Israel Corp , whose shares were up 1 percent.

The source noted that the sale of Potash’s stake would boost ICL’s free float of shares, which is now about 40 percent.

$1 = 3.4067 shekels Reporting by Steven Scheer

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