Incitec Pivot's disrupted journey towards splitting its fertiliser and explosives divisions into separate companies has taken a new twist with an Asian bidder potentially in the wings.
The big Australian-owned fertiliser entity has acknowledged it received approaches about the possible acquisition of the agribusiness operation.
However, no specifics have been provided, despite industry speculation about several possible overseas suitors.
"Discussions are incomplete and there is no certainty that any agreement will be reached or any sale transaction will occur," a statement from Incitec Pivot's board of directors said.
The company, which owns the global Dyno Nobel explosives business, insisted any potential sale would be assessed alongside its continuing plans for a demerger.
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Directors said they considered the demerger, announced last November, was still a strategic priority, although they would keep assessing all options "to ensure shareholder value was maximised".
One of the candidates speculated as a potential bidder for the fertiliser production, trading and distribution arm is Indonesia's government-owned, Pupuk, one of Asia's biggest fertiliser players.
Other Asian entities were also considered likely, according to industry analysts, while Canadian crop inputs giant, Nutrien, has been mentioned as having previously made an approach.
Financial media gossip has even suggested Incitec's big West Australian fertiliser and chemical sector rival, Wesfarmers could be eyeing off a portion of the fertiliser assets.
Incitec's demerger plans to create two publicly listed companies have been frustrated by delays, executive departures and profit setbacks during the past six months.
Share price reaction
All of which have contributed to the group's share price sinking from around $4.13 last November to a mid-June low of $2.60.
However, speculation about a possible fertiliser division sell-off has reignited investor interest in the past week, lifting the price to almost $3.
The drawn out demerger agenda was initially disrupted over summer when Incitec executives received offers to buy the Waggaman ammonia factory in Louisiana, which eventually resulted in a $2.5 billion sale agreement with CF Industries in the US.
In the meantime, skyrocketing spot market gas prices have added up to $90 million more to the fertiliser division's costs and global fertiliser prices have slipped from their heady values of a year ago, casting shadows over the company's potential performance as a standalone entity.
Shareholders have also questioned the wisdom of the demerger in the current erratic gas market.
The Dyno Nobel explosives business was originally brought into the Incitec Pivot fold in 2008 to help buffer the company from its exposure to big gyrations in global fertiliser markets and costs.
Dyno Nobel operates in Australia, Canada, the US, Africa, Indonesia, Mexico, South America, Papua New Guinea and Turkey.
Although chairman, Brian Kruger, indicated the demerger was still on track for this financial year, the Incitec Pivot group hit more potholes when managing director Jeanne Johns hastily left last month after five-plus years, then a week later fertiliser division chief executive officer, Christine Corbett, also decamped.
Ms Corbett, had only been in the role as the fertiliser boss for nine months after leaving a similar designated CEO's job at AGL last June to move to Incitec.
She indicated she was leaving because the fertiliser business' demerger was not going ahead until at least later this year.
In the meantime, chief financial officer, Paul Victor, has taken over Ms Johns' position as the group's acting CEO.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
