Incitec Pivot shareholders will collect a $500 million dividend bonus next week while they continue waiting for news about the mystery bid for their company's historic fertiliser business.
The money, part of a total $1 billion set aside for shareholders after December's $2.5b ($US1.6b) sale of the fertiliser and explosive company's recently-built US ammonia plant.
Shareholders, who still include a significant cohort of former Pivot Fertiliser co-operative members or their families, will receive payments totalling more than 25 cents for each Incitec Pivot share they hold.
The payments will take the form of a 10.17c/share unfranked special dividend worth $197.5m in total payments, and a 15.57c share equal capital reduction, with a total value of $302.4m.
The capital return becomes effective from today (January 29), with payments to be paid on February 8.
Incitec shareholders will be entitled to more cash when a further $500m netted from the Waggaman deal is used in a company share buyback later this year, once the fate of its fertiliser division is known.
As well, another $400m set aside last year will be spent on the on-market share buyback, when it happens, bringing the value of that spend to $900m.
In total, the $1.4b of capital returns will mean about 25 per cent of Incitec's capital will go back to shareholders.
The company's deflated share price has also rallied of late, up from six month lows around $2.70/share to start this week about $2.90.
Fertiliser heritage
Incitec Pivot's fertiliser history includes its Victorian-based Pivot origins as the Phosphate Co-operative Company of Australia, established in 1919.
The business built a substantial footprint 20 years ago as the three major east coast fertiliser businesses combined into one, creating Australia's biggest farm nutrient production outfit, supplying about half the fertiliser used in five states.
By early 2008 the company's shares had shot up to be worth more than $170 each as it also acquired Dyno Nobel's explosives business to help shockproof its fertiliser earnings from increasing market volatility.
However, in 2022 Incitec Pivot management decided to reverse the merger, planning to separate the fertiliser business from its globally active explosives sibling and spin it off as a separately listed company.
Then mid-last year, Incitec looked at alternative options, commencing negotiations with a so far unnamed potential overseas buyer.
The possible buyer is widely believed to be Indonesian state-owned chemical company, Pupuk Kalimantan Timur (Papuk Kaltim), although both parties have refused to confirm who is involved.
A sell-off would need federal government foreign investment and competition regulatory approvals.
Contentious issues
Industry speculation has suggested the sale's likely price tag, of close to $1.5b, has been one issue of contention, dragging out negotiations.
Due diligence investigations by the bidder ended in November.
There has also been wider farm sector concern about risks associated with a full foreign ownership bid for such an important farm inputs supplier.
Grain grower groups called for assurances that the Indonesian company's ambitions would be in Australia's farm production interests and wanted to be involved in discussions.
Nationals leader, David Littleproud, said the federal coalition was also prepared to seek a Senate inquiry into the pros and cons of any foreign bid.
Incitec Pivot chairman, Greg Robinson, told December's annual general meeting the company intended to complete the deal in the very near future, or walk away, returning to its previous demerger plan.
However, Incitec confirmed this week that while hoping to give shareholders more guidance about any pending deal as soon as possible, discussions were continuing and no fresh news was available.
Meanwhile, new managing director, Mauro Neves de Moraes, who started work in the top job last week, is making plans to fully acquaint himself with key staff and visit the company's processing and distribution operations from Mt Isa in western Queensland to southern Australia.
The former BHP mining executive replaced Jeanne Johns who left in June after more than five years in the job.