Brazil Vale Fertilizantes Shares Up 25% On Vale's Planned Buyout

Shares in Brazilian miner Vale SA's (VALE, VALE5.BR) fertilizers unit Vale Fertilizantes SA (FFTL4.BR) leapt 24.87% in trading on Brazil's Bovespa exchange Friday after Vale disclosed a plan to buy out minority shareholders in the unit.

Vale Fertilizantes closed at 23.60 Brazilian reais ($14.84), up from BRL18.90 on Wednesday, just before Vale disclosed plans to buy out minority shareholders for a price of BRL25.00 per share.

Currently, 15.66% of Vale Fertilizantes' total capital is traded on the open market in the form of voting and preferred shares. Late Wednesday, Vale said in a statement that its public offer for the outstanding shares, which is still subject to approval, would be worth up to BRL2.22 billion.

Credit Suisse said in a research note that it considered the offer attractive. "Vale is treating FFTL's minorities very well, paying a 32% premium over [Wednesday's] closing price," Credit Suisse analysts said.

Vale Fertilizantes resulted from the merger of assets acquired by Vale in 2010, when it bought Bunge Ltd.'s (BG) Brazilian fertilizer assets and Fosfertil SA, a local producer, for a total of $4.7 billion.

However, most of the company's fertilizer assets are abroad, including the Rio Colorado potash-mine project in Argentina and the Bayovar phosphates mine in Peru. Vale also has fertilizers projects in Canada and Mozambique.

Vale said the planned delisting of Vale Fertilizantes aims to allow the company to consolidate its growing fertilizers businesses. No initial public offering in the fertilizer assets is planned, it said.

Barclays Capital said Friday that the decision not to proceed with an IPO could disappoint some investors who had hoped an IPO would unlock value from this business.

Vale closed 0.57% higher on the Bovespa exchange at BRL44.10.

-By Diana Kinch, Dow Jones Newswires; 55-21-2586-6086; diana.kinch@dowjones.com

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