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Mosaic Favors Share Buybacks as It Sees $2 Billion Surplus Cash

Mosaic Co. (MOS), the world’s largest producer of phosphate crop nutrients, said it favors buying back stock over dividends to redeploy surplus cash, which is forecast to total about $2 billion at the end of this month.

The company’s dividend, currently 25 cents a quarter, will “grow in line with earnings growth,” Mosaic also said today in a regulatory filing of slides for an investor presentation.

Mosaic’s comments follow criticism from some shareholders that the company hasn’t distributed enough of its cash to them, Malcolm Polley, chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said May 7 in a telephone interview.

Plymouth, Minnesota-based Mosaic, North America’s second-largest potash producer by market value, had about $3.3 billion of cash as of the end of its fiscal third quarter in February, according to data compiled by Bloomberg.

“Investors are saying ‘show me the money,’” said Polley, who manages $1.1 billion including shares of Mosaic. “The fear is always that management does something stupid with the cash. I don’t think we have that issue with Mosaic, but there is always that fear.”

Mosaic fell 0.9 percent to $63.28 on May 10 in New York. The shares rose 12 percent this year.

(Mosaic scheduled a conference call at 9 a.m. New York time. To access, see http://www.mosaic.com.)

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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