Newspaper article St Louis Post-Dispatch (MO)

In Bunge, St. Louis Gains a Company in Transition

Newspaper article St Louis Post-Dispatch (MO)

In Bunge, St. Louis Gains a Company in Transition

Article excerpt

The St. Louis area landed a big corporate fish this month with Bunge's relocation from suburban New York. The question now is how long our trophy company can stay independent.

The agricultural giant was the object of takeover speculation as recently as December, when it reportedly was being pursued by both Archer Daniels Midland and Glencore. It's in the middle of a corporate restructuring, spurred by activist investors who won four board seats last year after a series of disappointing profit reports.

The restructuring -- which involves shifting from a decentralized operating model to a globally integrated one -- prompted the headquarters move to Chesterfield, already home to Bunge's North American unit. Once the restructuring is complete, the activist-influenced board could revisit the idea of selling the company.

"It's possible that those talks are restarted," Morningstar analyst Seth Goldstein says. "It's not off the table."

Goldstein thinks Glencore, a Swiss producer and marketer of metals, oil and agricultural commodities, is a more likely merger partner than Chicago-based ADM. An ADM-Bunge deal would combine two of the world's top soybean processors, raising antitrust issues.

If Chief Executive Gregory Heckman, who took the helm in January, can engineer a turnaround, the company might even command a premium price for shareholders. Bunge shares have fallen by almost a third in the last two years.

For now, the takeover talk is quiet as investors focus on what Heckman is doing to cut costs, improve risk management and rethink the business mix. He's already put an underperforming Brazilian sugar business into a bioenergy joint venture with BP.

As the restructuring continues, Goldstein speculates that Bunge might look at selling its fertilizer unit, or perhaps at separating its food ingredients and commodity-trading businesses. …

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