by Stephen Lacey
NEW YORK, Feb 3 (IFR) - The Mosaic Company is preparing to
sound out sovereign wealth funds to elicit participation in the
initial phase of a secondary stock sale that is expected to
The sounding effort, which is expected to begin in late
February, is designed to build an initial base of support for
what figures to be one of, if not the, largest transactions of
the year, according to two sources close to the process.
JP Morgan and Credit Suisse have been mandated as global
coordinators on the initial sale of up to 157m shares. The
initial sale is tentatively timed for April or May and is
designed to increase Mosaic's (MOS.N) free float from 36%
currently to above 50%, allowing the fertiliser producer to
qualify for inclusion in the S&P 500 Index - a full sale of all
the 157m shares would increase the free float to 73%.
Last month, privately-held Cargill CARG.UL and Mosaic
announced plans to sell off of the entire 64% stake. Of the
157m shares to be sold in the initial, "formation" sales
Cargill debt holders were to agree to exchange their positions
for 107m shares, with charitable trusts agreeing to sell 50m
The "formation" offerings are to occur over 15 months
within closing the split-off: one in the second quarter,
followed by a second sale six to nine months later. The
remaining roughly 129m shares could be sold in three equal
installments beginning 2.5-years after the initial closing.
The split-off is conditioned upon approval by Mosaic's
existing shareholders. At the time of the initial announcement
on January 18, Mosaic said it would file a proxy statement by
early February, with a vote to follow about one month after
The proxy statement has not been filed with the SEC.
Mosaic spokesperson Rob Litt said that there is no change
in the time-line for the split-off. He declined comment on any
details associated with marketing of the stock sale, including
the potential of targeting sovereign wealth funds.
The decision to sound out sovereign wealth funds is
motivated, at least in part, by recent political unrest tied to
rising food prices, according to one of the sources.
Fertilizer prices, which skyrocketed to historic highs in
2008, are beginning to rise.
Mosaic has committed to spend US$1.2bn-$1.4bn this year on
capital expenditures targeted at boosting production, including
expanding potash production at three Canadian mines.
(Stephen Lacey is U.S. Editor of International Financing
Review, a Thomson Reuters publication)