A cross-practice team of attorneys from Loeb & Loeb LLP’s Corporate, Securities, Trusts and Estates, and Tax Groups have been providing ongoing representation to the Margaret A. Cargill Philanthropies in devising and implementing a multi-billion dollar asset monetization plan. The cornerstone of the plan was the $18.6 billion split off of The Mosaic Company from Cargill, Incorporated, which included the $7.5 billion secondary public offering by The Mosaic Company, recognized by Thomson Reuters International Financing Review as the publication’s 2011 U.S. Equity Issue of the Year.
When Margaret A. Cargill died in 2006, she owned 17 percent of Cargill and was its largest stockholder. Cargill is a private, family controlled producer of food, agriculture, financial and industrial products. All of the shares were left to the Margaret A. Cargill Philanthropies. The trustees of the Philanthropies were obligated to diversify the assets, which meant that the trustees would have to dispose of all or substantially all the shares. A consensus developed during 2009 for Cargill to unwind its 64 percent stake in The Mosaic Company, a publicly traded fertilizer company, in a tax-free split-off transaction.
The split-off of Mosaic by Cargill was consummated in May 2011. At the closing, the Mosaic shares held by Cargill were valued in total at $18.6 billion, of which the Philanthropies received 114.5 million Mosaic shares valued at $7.4 billion. Cargill sold 107.5 million shares to retire approximately $6.8 billion in debt. The balance of the shares was acquired by Cargill’s other stockholders. At the closing, the Philanthropies sold 7.5 million shares as part of the $7.5 billion secondary public offering. In September, the Philanthropies sold 20.7 million shares for approximately $1.2 billion in a secondary public offering effected in connection with Mosaic’s inclusion in the S&P 500. In November 2011, the Philanthropies sold an additional 21.3 million shares back to Mosaic for approximately $1.2 billion. The Philanthropies still have 65 million shares remaining to be sold. The aggregated proceeds from these transactions will result in the Margaret A. Cargill Philanthropies being among the largest charitable foundations in the country.
Loeb & Loeb New York partners David Fischer, Angela Dowd, Alan Tarr and Norwood Beveridge handled corporate and tax matters related to the transactions on behalf of the Philanthropies. Los Angeles partners Leah Bishop, Linda Deitch and Stuart Tobisman advised the trustees on the estate, trusts and charitable aspects.