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To: ~digs who wrote (4303)	5/31/2008 8:32:29 PM
From: ~digs	Respond to of 7944

Archer Daniels Midland shares fall after company says it will sell 35 million equity units biz.yahoo.com Shares of Archer Daniels Midland Co. fell Wednesday, a day after the company said it will sell 35 million equity units for a total of up to $2 billion. After the market closed Tuesday, the agricultural products company said it will sell the equity units at $50 each. The company added it will also allow underwriters to buy an additional 5 million for overallotments. Each equity unit is essentially a contract to buy the company's stock and a 5 percent beneficial ownership interest in a $1,000 bond due in 2041. ADM said it will use the proceeds of the offering for "general corporate purposes," including paying back short-term debt and investing in long-term growth opportunities. Citi analyst David Driscoll said in a note to investors that the offering may lower the company's earnings per share by 2 cents for each of the first three years and could cut into profit by about 20 cents per share by year four when the stock is issued. ADM spokesman Jessie McKinney said the company cannot comment since it is currently in a quiet period relative to the offering. Despite the possible hit on profit, Driscoll said the offering puts ADM in a position to "weather a prolonged period" of high agricultural prices. "We believe that the substantial needs for working capital to fund agricultural inventories and new investment opportunities are the basic rationale for the offering," he said. ADM processes soybeans, corn and wheat and manufactures products from those grains, including soybean oil and meal, corn sweeteners and flour. When prices rise for grain, it costs ADM more to make those grain-based products.