Saskatchewan Wheat Pool Inc. (SaskPool) said late March 29 that it has sweetened the pot in its hostile takeover attempt of Agricore United (AU), increasing its offer to $8.00 in cash and 0.95 SaskPool common shares for each AU common share. SaskPool says its offer is now $4.00 more per limited voting share than the competing offer (GM Feb. 26, p. 14) by James Richardson International Ltd. (JRI), and that its total consideration is valued at $17.86 ($8.00 cash) per share versus JRI’s at $13.79 ($6.50 cash). SaskPool has launched a public market bought deal of subscription receipts totaling $275 million to help it fund its increased offer.
The new SaskPool offer expires on April 19 at 5:00 p.m. Toronto time.
AU said it is reviewing the new SaskPool offer and will respond in due course. It advised shareholders to take no action in the meantime.
In addition to the increased offer, SaskPool has lined up Cargill Inc. to buy certain assets, including crop input outlets, should the SaskPool/AU deal go through. SaskPool has entered into a consent agreement with the Canadian Competition Bureau in which SaskPool would shed these assets so as to accommodate a merger of SaskPool and AU. SaskPool says the move will boost its synergies with AU to $80 million from a previously reported $60 million. AU complained earlier that SaskPool had not backed up its claims of $60 million in synergies.
Assets to be sold to Cargill include five crop input/grain handling facilities in Western Canada, including those in Davidson, Kindersley, and Congress, Sask.; Camrose, Alberta; and Elva, Manitoba. Grain handling facilities would also be sold in Vermilion, Blackie, Viking, and Equity, Alberta.
In addition, SaskPool would sell a 100 percent-owned terminal located on the North Shore of the port of Vancouver to Cargill, and Cargill would sell its 50 percent interest in the Vancouver Cascadia Terminal to SaskPool.