Bunge buyback makes Corn Products bid less likely, BMO says

Bunge Ltd., the world's second-largest sugar trader, is less likely to revive a bid for Corn Products International Inc. after announcing a plan to buy back as much as $700 million of stock, BMO Capital Markets said.

"The share repurchase program further reduces the probability that Bunge acquires Corn Products (at least at current valuations)," Ken Zaslow, a BMO analyst in New York who rates the stock "outperform," wrote in a note today. The buyback doesn't dampen Bunge's appetite for acquisitions and should improve investor sentiment, he wrote.

Bunge said yesterday its board approved a plan to buy back common shares through Dec. 31, 2011. The White Plains, New York- based company completed the sale of its Brazilian fertilizer assets to Vale SA for about $3.5 billion in May.

Alberto Weisser, Bunge's chief executive officer, said in January that he may consider another bid for Corn Products. Bunge terminated a purchase agreement in 2008 as the economic crisis cut the value of the all-stock offer and the Westchester-based corn processor withdrew support for the deal.

Bunge rose $2.93, or 6.2 percent, to $50.69 at 11:21 a.m. in New York Stock Exchange composite trading. The shares fell 25 percent this year before today. Corn Products gained 2 percent to $32.64, valuing the company at $2.5 billion.

Bunge spokeswoman Susan Burns didn't immediately return a call seeking comment. Corn Products spokesman Mark Lindley declined to comment.