‘Plenty of interest’ in Incitec Pivot’s fertiliser business

Incitec Pivot boss Jeanne Johns says there’s “plenty of interest” in the company’s fertiliser division, which is currently the subject of a strategic review that could lead to its sale.

The interest had come from a broad range of potential buyers from “different places”, she said on the sidelines of the company’s annual shareholder meeting in Melbourne.

Incitec Pivot chief executive Jeanne Johns addresses shareholders at the company's annual general meeting in Melbourne on Friday.
Incitec Pivot chief executive Jeanne Johns addresses shareholders at the company’s annual general meeting in Melbourne on Friday.

But Ms Johns said it was still too early to know precisely how interested potential buyers were.

“We expected to have good interest and we’ve seen that … it’s too early to see how serious they are, serious is when they actually say how much they’d pay for it, just to put it in very colloquial terms.


“There’s no doubt there’s plenty of people that would love the business, but our shareholders obviously want to make sure that if we were to sell it that we get good value,” she told The Age and The Sydney Morning Herald.

The ASX-listed fertiliser and explosives maker, which has a market capitalisation of about $5.25 billion, announced the strategic review of its fertiliser division in September, noting at the time it could lead to a sale, demerger, or its retention with the backing of more investment.

Incitec Pivot chairman Brian Kruger said the company expected to finalise its position on the strategic review during the second half of this financial year.

Investment bankers from UBS are now testing the level of market interest in the business, which has about a 50 per cent share of the fertiliser market on Australia’s east coast.

The strategic review was announced towards the end of a very challenging financial year for the company. The review coincides with a downturn in grain and other crop production due to drought, which has cut demand for fertiliser among farmers.

Last month Incitec Pivot reported a 56 per cent fall in net profit to $152.4 million, after the company’s performance was hit by floods, drought and manufacturing interruptions.

On other matters, investors waved through the company’s remuneration report with 98.19 per cent of votes cast in its favour.

Shareholders also voted in favour of the grant of performance rights to Ms Johns, but there was a solid 13.63 per cent vote against this resolution.

Proxy adviser firm ISS Governance had urged a vote against the equity grant resolution, noting that “the quantum of the award continues to be well above those granted at peer companies,” in a report issued to its clients.

Shareholders also re-elected Dr Xiaoling Liu and Gregory Robinson to the board of Incitec Pivot. But Mr Robinson recorded a solid 14.92 per cent vote against his election.

Incitec Pivot shares closed closed flat on Friday at $3.27, the exact same price it closed at on the same day last year.

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Source: Thanks smh.com