Shareholders Losing Confidence in Monsanto

EXTRACTS from Reuters article below:
"Shares of biotech agricultural company Monsanto Co fell to a 52-week low on
Monday"

"Market observers had speculated that Pharmacia shareholders could be quick
to dispose of Monsanto stock following the spinoff. Now with Pharmacia
moving to shed Monsanto before the Pfizer deal closes, there is less time
for Monsanto to restablish confidence in its earnings after a recent profit
warning."

"Monsanto, which in June sharply cut its earnings outlook through 2003, has
been beleaguered of late by troubles in Latin America, increasing
competition for its top-selling Roundup herbicide product, and problems
gaining global acceptance of its genetically modified seed technology. "

********************************
Monday July 15, 4:30 pm Eastern Time
Reuters Company News
Monsanto stock slips on Pharmacia-Pfizer deal
By Carey Gillam

KANSAS CITY, Mo., July 15 (Reuters) - Shares of biotech agricultural
company Monsanto Co. (NYSE:MON - News) fell to a 52-week low on Monday
before recovering after its parent, drugmaker Pharmacia Corp.
(NYSE:PHA - News), agreed to be acquired by industry leader Pfizer
Inc. (NYSE:PFE - News).

Some industry analysts speculated that Pharmacia may be pressured to
move up its planned spin-off of Monsanto, giving it less time to
reestablish market confidence in its earnings after recent
profitability problems.

Pfizer, the world's largest drugmaker, said it had agreed to buy its
U.S. rival Pharmacia for about $51 billion in stock, representing
about a 20 percent premium for Pharmacia shares.

Pfizer's plan to complete the Pharmacia acquisition by year's end
could speed up the spinoff of Monsanto shares, which was originally
slated to happen in the fourth quarter of this year. Pfizer has said
the mega-merger is contingent on Monsanto shares already being spun
off.

Pharmacia said Monday it would spin off Monsanto "as soon as
practicable this year," and it would not comment further.

Stock in St. Louis-based Monsanto was already under pressure prior to
the Pfizer deal on anticipation of the spinoff, which is to be handled
as a tax-free dividend of Monsanto shares to Pharmacia shareholders.

Market observers had speculated that Pharmacia shareholders could be
quick to dispose of Monsanto stock following the spinoff. Now with
Pharmacia moving to shed Monsanto before the Pfizer deal closes, there
is less time for Monsanto to restablish confidence in its earnings
after a recent profit warning.

"Now it could be viewed more as a fire sale... to get it done quickly
at any price," said Buckingham analyst John Roberts.

Monsanto's stock sank more than 12 percent in early trading on Monday
before closing off 58 cents, or more than 3 percent, at $16.99 on the
New York Stock Exchange. In early trading on Monday, the stock hit a
52-week low of $15.30.

Monsanto Chief Operating Officer Hugh Grant said Monday that he had no
information about a change in timing of the spinoff.

"I don't have a date," Grant said. "We've been preparing for the
spinoff. We're getting ourselves organized here and we'd be ready to
go."

Monsanto, which in June sharply cut its earnings outlook through 2003,
has been beleaguered of late by troubles in Latin America, increasing
competition for its top-selling Roundup herbicide product, and
problems gaining global acceptance of its genetically modified seed
technology.

Monsanto has been evolving from a company largely dependent on its
crop productivity products to one driven by seeds and genomics
technology.

Analysts said Monsanto was seen as a leader in its key business lines,
and pricing action Monday was at least in part tied more to arbitrage
than concerns about Monsanto, which produces herbicides, seeds and
other agricultural products.

Monsanto is the "preeminent bioag company in the world," said Deutsche
Bank analyst John Moten. The stock drop, he said, was much more "going
long on Pharmacia and short on Monsanto."

Grant said the blockbuster merger of the drug companies would have
little impact on the fundamentals of the biotech agricultural concern.

"In terms of how we run the business, I don't think it changes much,"
Grant said. "Pharmacia has been very, very good. We've reported in to
the management structure there. They've said deliver on certain
milestones and targets, but other than that they've pretty much let us
run our own business."

Pharmacia, which was then Pharmacia & Upjohn, merged with St.
Louis-based Monsanto in April 2000. The drug company sold off 15
percent of Monsanto in a public offering in October 2000 and had
planned to spin off the rest in the fourth quarter of this year.

Pharmacia obtained the wildly successful Cox-2 inhibitor Celebrex drug
through its purchase of Monsanto. The treatment for osteoarthritis and
rheumatoid arthritis has been a key revenue driver for Pharmacia and
is seen as one of the jewels driving the premium Pfizer is willing to
pay for Pharmacia.

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