Monsanto stock rises by 5.8 pct.
[St. Louis is Monsanto's home town]
Wednesday, November 25, 1998
By [Robert Steyer
Of The Post-Dispatch
Monsanto Co.'s stock rose 5.8 percent Tuesday, one day after the company
received a favorable bond rating and revealed some details of its financial
independence plan. The shares were up $2.38 to $43.38.
On Monday, Standard & Poor's Corp. reaffirmed its investment grade ratings on
Monsanto's long-term debt and commercial paper. The ratings are important to
Monsanto's money-raising efforts after last month's collapse of merger talks with
American Home Products Corp.
Last week, two other firms slightly downgraded Monsanto's debt, but the ratings
remain investment grade. The ratings will determine Monsanto's cost of issuing
$2.5 billion in long-term, unsecured debt - perhaps as early as next week.
The debt is part of a financial package, announced two weeks ago, as Monsanto
tries to show Wall Street it can survive as an independent company that will cut
its debt and also maintain adequate support for research and marketing. The
package includes raising at least $1 billion by selling some assets.
In the transactions announced Monday:
* Monsanto will sell $900 million in stock - 22.5 million shares at $40 a share.
* Underwriters can offer 2.46 million more shares if the stock offering attracts a
stampede of investors,
* Monsanto will offer $700 million worth of a hybrid product called an
adjustable conversion-rate equity security.
The company, which predicts it will clear $1.55 billion after transaction
costs, expects these securities to be sold by Nov. 30. The money will help
Monsanto complete a pair of big seed company acquisitions.
Copyright (c) 1998, St. Louis Post-Dispatch
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