FMC (FMC 1.79%), an agriculture science company, announced in February that it would pursue strategic options, including the sale of the company, to "unlock shareholder value." It has been a couple of months since the company's public announcement.
The news certainly moved the stock, but what does this mean for investors? It's a good time to take a look at the company to see if it's a viable takeover candidate and whether investors should put their money here.
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Underwhelming results
It's challenging to decipher FMC's revenue and earnings since it has a lot of moving parts, namely the potential sales of its Indian division and certain charges, such as for restructuring.
Nonetheless, taking these into account, FMC's recent results have been underwhelming. On a comparable basis, 2025 revenue dropped 5% versus the previous year.
FMC's adjusted diluted earnings per share (EPS) also fell. Its EPS dropped 14.9% year over year to $2.96.
Potential buyers
Nonetheless, the company has drawn interest from various parties, according to management's comments at an investor conference.
The takeover interest has come from different types of buyers, namely corporations and private equity firms. Apparently, they're willing to overlook FMC's current results.
That's because they believe, at least right now, that the company potentially has a product pipeline that will fuel revenue and profit gains.
Investment decision
The stock price has surged since the company's announcement that it put itself up for sale. Since the start of the year, FMC's shares have risen 28% through April 2. By comparison, the S&P 500 (^GSPC +1.18%) has hit a rough patch since the onset of the Iran war. The index has lost 3.8% during this time.
NYSE: FMC
Key Data Points
What's the likelihood of the company getting taken over at a premium to the current price? While it appears there has been an initial indication of interest, it's unclear if parties will drop out once they conduct their due diligence.
The reality is, no one knows if the company will ultimately get acquired. But the stock's price surge indicates there may not be much room for upside. However, if the company doesn't consummate a deal, the share price may fall quite a bit.
In early February, before the company publicly announced it would seek a sale, FMC's stock traded at about $16. It currently trades about 11% above that level. Should the company not get acquired, it's logical to assume the share price would fall back to the price it was trading at before management revealed it would look to get acquired.
When a stock doesn't trade on fundamentals but on an unpredictable bet of an acquisition, long-term investors should avoid the situation.
