Mosaic Climbs Amid Reported Interest From Brazil's Vale

Shares of Mosaic Co. (MOS) opened nearly 10% higher on Thursday after a Brazilian news agency reported that mining group Vale SA (VALE) is considering a bid for the fertilizer producer.

According to Estado, Vale is considering a bid valued at about $25 billion.

Vale and Mosaic declined comment when contacted by Dow Jones Newswires.

The fertilizer sector has been ripe with takeover activity in recent months following a precipitous plunge in valuations from the peak reached at the height of the commodities boom last year.

Roger Agnelli, Vale's chief executive, has said the company aimed to develop its potassium-mining business to serve Brazil's fast-growing agricultural sector.

The company paid around $850 million earlier this year for potassium mining assets in Argentina and Canada. Brazil's reliance on fertilizer imports could also provide synergies for Vale, which controls key transport infrastructure linking the country's agricultural heartland to ports.

The market value of Mosaic, which was floated as a joint venture pooling assets from Cargill Inc. and IMC Global Inc. (IGL), have more halved from a peak above $70 billion over the past year.

Mosaic shares were recently up 9.8% at $48.98, valuing the company at aorund $19.2 billion.

The company derives almost 60% of revenue and more than half of its earnings from phosphate-based products, the hardest-hit sector of a market suffering from weakening demand and stocks of high-priced inventory.

In April, the company reported an 88% drop in fiscal third-quarter profits.

The drop in Mosaic earnings had raised speculation that Cargill may seek to buy out its partner and minorities. the company declined comment on the matter Thursday.

The reported bid interest comes amid a three-way tussle between North American fertilizer producers. CF Industries Holdings Inc. (CF) is fending off a hostile bid from Canada's Agrium Inc. (AGU), while pursuing its own unsolicited offer for Terra Industries Inc. (TRA).

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; [e-mail]

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; [e-mail]