Morgan Stanley doubtful of Incitec Pivot's likely fertiliser business sale

Dyno Nobel

03/08/2023 04:07

** Analysts at Morgan Stanley sceptical about Aussie
chemicals and fertiliser maker Incitec Pivot's  IPL.AX  decision
to sell fertiliser unit
    ** On Wednesday, media reports suggested it was in talks
with Indonesian urea and ammonia producer in deal potentially
worth A$1.5 bln ($980.25 mln)
    ** MS values the business at around A$900 mln; says deal
value as reported by media would be best for shareholders
    ** But MS sees obstacles - additional costs from supply
issues, consequent impact to profits
    ** "Plant has historically been poorly positioned on the
cost curve and additional gas costs could make it unviable at
long-run fertiliser and currency prices" - MS
    ** Five of 11 analysts rate "buy" or higher and six rate it
"hold"; their median PT is A$3.32 – Refinitiv data
    ** IPL down 0.7% at A$3.040, as of 0216 GMT

($1 = 1.5302 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))