FMC Corp. said Friday its board is considering a plan of recapitalization that would leave the company public.
FMC`s stock price rose to an all-time high after the announcement, adding to strong gains from earlier in the week.
The company`s brief statement left many questions unanswered, but appeared to quash rumors that FMC might be taken private in a leveraged buyout.
FMC also said it hasn`t been in discussions ”with third parties regarding acquisitions” and that ”no discussions are intended.”
The Chicago-based company said its board is also considering adopting a preferred stock rights plan, apparently as an antitakeover measure.
FMC said it expects to disclose ”the actions, if any, taken by the board” at its Friday meeting before the opening of trading Monday on the New York Stock Exchange.
Analysts speculated FMC could be planning to repurchase its common stock for the second time in two years. In 1984, the company bought back shares from existing stockholders at a premium.
”Obviously, the market thinks there`s something wonderful going on,”
said Katherine Stults of Dean Witter Reynolds.
FMC`s stock resumed trading at a record high of $87 a share, up $5.50, after a halt in trading Friday morning, and up $6.25 from Thursday`s close. Earlier in the week, the stock rose $9, including $6.25 on Thursday alone.
FMC repurchased about one-fourth of its common stock outstanding in 1984, Stults said.
FMC stock had been trading at about $40 a share at the time, she said, and the company paid up to $54 a share as part of the repurchase.
Sean St. Clair, an analyst for Duff & Phelps, said FMC might choose to buy back stock again because of an expected drop in its defense division sales in 1986 as two military-equipment contracts wind down.
The repurchase would help FMC avoid reporting ”a down year” in earnings per share, St. Clair said.
