The Mosaic Co. has entered into a Share Repurchase Agreement with the Margaret A. Cargill Foundation and the Anne Ray Charitable Trust (collectively, the MAC Trusts) to purchase all of their 43.3 million restricted Class A shares over the next eight months. In the initial transaction, Mosaic will purchase 21.7 million of the MAC Trusts’ Class A shares on Jan. 8, 2014, at a price determined by the volume weighted average closing price of Mosaic’s common stock during the preceding 20-day trading period. The remaining 21.6 million Class A shares will be purchased by Mosaic beginning in Feb. 2014 in seven equal installments at the close of each successive 20-day trading period using the same volume weighted average pricing formula as the initial transaction.
In connection with the agreement, the MAC Trusts have also agreed to release Mosaic from the contractual obligation to register any remaining common shares in a secondary offering.
"This agreement demonstrates our confidence in the future and effectively puts the Cargill split-off transaction behind us," said Jim Prokopanko, Mosaic president and CEO. "This is a major step toward our goal of a more efficient balance sheet by mid-2014. In addition to possible purchases of the MAC Trusts’ remaining common shares, we are continuing to evaluate other shareholder return options as we head into the new year.
"Our priorities have not changed. We intend to maintain our investment-grade ratings and the financial flexibility to take advantage of appropriate opportunities to grow our business. We will continue to focus on executing our strategy and create value through appropriate capital allocation."
JP Morgan Securities LLC has served as Mosaic’s financial advisor for the Cargill split off transaction and the evaluation of alternatives for ensuring the orderly distribution of restricted shares, including the Share Repurchase Agreement between Mosaic and the MAC Trusts. Citigroup Global Markets Inc. served as the MAC Trusts’ financial advisor in connection with the Share Repurchase Agreement.