Investors in Mosaic Co. (NYSE:MOS) gain control but little clarity from the fertilizer company's split from majority owner Cargill Inc., a deal that raises significant questions about Mosaic's prospects as an M&A target.

Privately held agribusiness giant Cargill formed Mosaic in 2004 by merging its fertilizer business with IMC Global, and has controlled 64% of the publicly held company's shares since. The two companies announced plans late Tuesday to end that relationship with Cargill, which had been seeking liquidity for some of its shareholders, set to distribute its $24 billion stake in Mosaic to Cargill holders.

The deal is viewed as a long-term positive for Mosaic, allowing it more autonomy when it comes to managing its $2 billion cash horde and the freedom to position itself for expected growth in fertilizer sales to emerging markets.

Hopes that the transaction would free Mosaic to participate in an ongoing round of consolidation in the fertilizer patch were dimmed as details of the tax-free divestiture process were made public. Analysts say the agreement would effectively push Mosaic to the sidelines for two years, eliminating its ability to pursue share buybacks and limiting its deal prospects.

Those limitations could be costly, as many saw Mosaic as an attractive target for a mining company such as BHP Billiton Ltd. (NYSE:BHP) or Vale SA (NYSE:VALE) interested in adding potash and phosphate to their portfolio of precious metals. Billiton last year attempted a hostile $40 billion bid for Mosaic rival Potash Corp. of Saskatchewan Inc. (NYSE:POT), a battle that sparked interest in all fertilizer stocks and sent Mosaic shares soaring from a low of $37.68 last summer to a recent high of $85.45.

Those shares fell more than 7% to $78.50 on Wednesday afternoon.

Investors must also now grapple with the bigger question of whether Mosaic is as attractive as a takeover target as they had hoped.

There were whispers Wednesday that Cargill had at least informally shopped its Mosaic stake to potential strategic acquirers over the past year, only to end up announcing a spinoff.

"You have to assume that means Cargill didn't get the valuation they had hoped for," one investor says, adding that Cargill in divesting could be signaling that it believes Mosaic's value has peaked.

Barclays Capital analyst Farooq Hamed remains upbeat, arguing that Cargill's move is nothing more than a way for it to extract liquidity and deal with internal issues. "We continue to believe that fertilizer fundamentals are improving as crop prices continue to climb and as such do not believe this transaction represents Cargill calling the 'top of the market,' " Hamed wrote.

Maybe so, but with a complex split on the horizon for Mosaic, it could be a while before new suitors come calling.