Wall Street Says Monsanto Is In Trouble

Farm News from Cropchoice
An alternative news service for American farmers
http://www.cropchoice.com

Monsanto Sale May be Reconsidered
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(Cropchoice News - 27 June) -- A report Monday in Corporate Financing
Week suggests the future of the "new" Monsanto is in question. According
to the story, the recently announced "initial public offering" sale of
Monsanto stock may be delayed or the entire agriculture company may be
sold instead.

Pharmacia, a Swedish pharmaceutical company, completed its buyout of
Monsanto in March. Pharmacia took the pharmaceutical division of Monsanto
(Searle) into its own operations; but left the agriculture operations as a
stand-alone division. Pharmacia then filed government paperwork to sell a
20% stake in the "new" Monsanto (i.e. the agriculture part of the old
company).

But Corporate Financing Week says big investors in Pharmacia now believe
the plan to sell 20% of a agriculture-only Monsanto may go badly and
should be reconsidered. The issues that are clouding the sale, which was
to take place next month, are uncertainly about GMO crops (which makes
Monsanto's value uncertain) and concerns about the company's
profitability.

The solutions being considered include either reducing the number of
shares offered in the "new" Monsanto to drive interest up, or to sell off
the whole agricultural company. Selling the whole company would be
following the lead of major players like Novartis (maker of NK Seeds),
which is reducing its exposure to ag biotech by spinning off crop
divisions into a separate company, called Syngenta.

According to Corporate Financing Week "rumors are swirling in the market
that the Monsanto division [of Pharmacia] is not having a good quarter..."
The investor's concern about Monsanto's sales comes from a slight downturn
in the first three months of the year and low grain prices. Monsanto's
also recently offer to refund some southern cotton farmers' tech fees on
Bt and RR cotton due to losses caused the drought. This may not be
helping please stockholders either.

Monsanto is estimated to be worth $5 - $10 billion - the wide price range
is due to uncertainty over the future of GMOs. If Pharmacia proceeds with
the selling the 20% stake, analysts estimate share price would be $6-$10.

SOURCE: Corporate Financing Week, Monsanto