Monsanto offers hormone division; Mirant rejects mystery offer; more talk on Sprint

By Aaron Hochman-Zimmerman

New York, Aug. 8 - A slow week in deal-land was juiced up by Monsanto Co. which offered up its bovine hormone-producing Posilac division.

The hormones are designed to help a cow produce an additional 10 pounds of milk per day, but the division may also produce a public relations cow pie for Monsanto.

Elsewhere, SprintNextel Corp. was the subject of more market chatter, this time involving a possible buyout by usual deal-making suspect Google Inc.

In energy, a deal for or by Mirant Corp. was at once introduced and dismissed by the same earnings release. Sources believe that is the last the market will hear about this particular transaction.

Also, the long-running transaction between CME Group Inc. and Nymex Holdings Inc. was one day closer to Nymex's shareholder meeting as well as $1.3 billion in financing richer from CME's recent bond issue.

Meanwhile, the Dow Jones Industrial Average had a big recovery day as it added 302.89, or 2.65%, to end at 11,734.32, while the Nasdaq Composite Index added 58.37, or 2.48%, to finish at 2,414.10.

The S&P 500 gained 30.25, or 2.39%, to close at 1,296.31.

Monsanto pushes hormone division

Monsanto hung a for sale sign on its division which makes Posilac, a bovine hormone, on Wednesday and the company has still not seen any interest, according to Wall Street Access analyst Charlie Rentschler.

"It was kind of curious that they made that announcement without a buyer," he said.

Posilac is not Monsanto's "mainstream" business, Rentschler said, but it has been something of a public relations distraction to the entire operation.

"While Posilac is a strong product for the business, we believe repositioning the business with a strategic owner will allow Monsanto to focus on the growth of its core seeds and traits business while ensuring that loyal dairy farmers continue to receive the value of Posilac in their operations," said Carl Casale, Monsantos executive vice president of strategy and operations in a statement.

"There's been plenty of backlash," Rentschler said.

The problem comes from a perception by the public that Posilac harms cattle, "which I think is a bunch of bulls-t," Rentschler said.

"Maybe they're tired of dealing with all of that stuff," he offered as a possible reason for the timing of the sale.

Still, "it's a sideline business and it shouldn't come as a surprise that Monsanto wants to divest itself from it," he said, "even if there weren't any PR issues."

Rentschler was at a loss to guess which company may want to buy the Prosilac division, but it is an asset which is not likely to simply be put out to pasture.

"I think there's probably some good value there," he said.

Shares of Monsanto (NYSE: MON) were better by $0.34, or 0.32%, to finish at $107.66.

Traders play telephone with Sprint

The rumors which surround SprintNextel have been subject to a series of subtle changes as they have been passed from person to person across deal-land.

"There always seems to be that though," an equity analyst said about Sprint.

Friday's rumor de jour was that internet innovator Google had the number of the embattled telecom and was looking to buy.

"Google is a more unique suitor than I've heard," the analyst said with a full serving of sarcasm on the side of the word "unique."

"I didn't find much credibility in it," he said.

Recent discussions which have followed Sprint have been over the possible sale of its iDen, two-way talk business as well as a cancelled offering of $3 billion in convertible preferred stock.

Shares of SprintNextel (NYSE: S) jumped $0.93, or 11.94%, to $8.72.

Mirant pulls plug on deal

Mirant's revelation, buried in Friday's earnings report, all at once enlightened the market that in June it had some sort of deal on the table - but now no longer does.

Beneath a heap of earnings-related material Mirant placed this statement: "At the end of June, Mirant was approached by another company about a possible transaction that had the potential to add value for stockholders."

Followed by: "We have concluded that we will not pursue the transaction," Edward Muller, Mirant's chairman and chief executive officer, said in the release.

The earnings release did not further illuminate the subject.

"They didn't even say what it was," an equity analyst said, "That could've been anything."

Even the question of whether or not the mystery deal is still an option is in question, although "to me, it's nothing we're going to follow," the analyst said.

Shares of Mirant (NYSE: MIR) took on $0.09, or 0.32%, to end at $28.50.

CME gathers another $1.3 billion

The CME Group moved $1.3 billion closer to funding its $9.4 billion cash and stock deal with Nymex Holdings as it priced that amount of corporate bonds on Thursday.

The deal seems to be in a strong position, a market source said.

The next major event is the Aug. 18 Nymex shareholder meeting when investors will vote for or against the merger.

"It should go through," the source said.

Shares of CME Group (NYSE: CME) tacked on $13.64, or 4.15%, to close the day at $342.13.

Shares of Nymex Holdings (NYSE: NMX) improved by $0.93, or 1.18%, to end the session at $79.90.

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