U.S. fertilizer company Mosaic Co said on Monday that it would buy back 43.3 million restricted shares, or about 10 percent of its outstanding stock, 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 adds some support to a stock that has fallen about 17 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.
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.
Mosaic stock closed on Friday at $46.79, which would value Monday's transaction at about $2 billion.
Shares of Mosaic climbed 1.4 percent in New York to $47.46 in premarket trading.
The company said it would buy 21.7 million of the MAC Trusts' shares on Jan. 8 at a price based on the volume-weighted average closing price during the previous 20 trading days. It plans to buy the remaining 21.6 million share in seven equal installments starting in February at the close of each successive 20-day trading period.
Mosaic Chief Executive Officer Jim Prokopanko said the company was evaluating other moves, including possibly buying the trusts' remaining common shares.
Mosaic was formed in 2004 by a combination of Cargill's crop nutrition business with IMC Global.