Agricore United, Winnipeg, the diversified agribusiness that is the largest seller of fertilizer, seed, and crop protection products in Canada, is taking a cautious look at the hostile acquisition offer earlier this month by Saskatchewan Wheat Pool Inc. (GM Nov. 13, p. 1), according to Agricore officials. A special committee of independent directors has been appointed to conduct the evaluation, along with looking at other alternatives, including continuing as a stand-alone company.
Agricore, which received a stock-and-cash proposal Nov. 7 from Regina-based SaskPool valued at more than $580 million, has advised shareholders the offer was a hostile proposal, not a merger, since Agricore has had no conversation with SaskPool on the proposal. “So far, we have only an announcement of an intention to make an offer and very few details,” the company said in a letter to shareholders, who were advised not to tender their securities to the hostile offer before any response was delivered.
The special committee is chaired by Jon Grant, and includes Wayne Drul, Maurice Lemay, James Wilson, and Terry Youzwa. Scotia Capital Inc. and Blair Franklin Capital Partners Inc. have been engaged as financial advisors, with Davies Ward Phillips & Vineberg LLP as legal advisor. The board of directors will make recommendations and comments after receiving a report from the special panel.
Combined, Agricore and SaskPool have an estimated $1.33 billion in agricultural input sales annually, with sales made through approximately 300 locations, according to statistics compiled by Green Markets (GM Nov. 13, p. 1). Estimates are that a combined Agricore/SaskPool would control over half of the grain handling capacity in Western Canada, according to the Canadian press.