Agricore accepts offer from James Richardson
April 19, 2007
by Eric Schroeder
WINNIPEG, MAN. — Agricore United announced it has accepted an all-cash offer from James Richardson International Ltd. for 100% of the limited voting common shares of Agricore at a price of C$19.25 per share. The transaction, which has been approved by Agricore’s board of directors, has a total value of approximately C$1.8 billion. The agreement includes a termination fee of C$35 million and is expected to be completed in June.
Agricore said it rejected a different proposal from J.R.I. of C$20 in cash that included support from Archer Daniels Midland Co., Agricore’s principal shareholder, because it would have ruled out any competing higher offers.
The announcement comes less than a week after the Saskatchewan Wheat Pool announced it would raise another C$315.9 million ($279.6 million) in a bought deal of subscription receipts. The funds, together with funds raised from previous subscription receipts offerings, were to be used to help finance its hostile offer for Agricore United.
Agricore United, Canada’s largest grain company, had been weighing the S.W.P.’s offer of C$8 in cash and 0.95 of a Saskpool share for Agricore, against a lower bid from privately J.R.I., Canada’s third-largest grain company. In late February, the Agricore board approved a merger between J.R.I. and Agricore that would have had Agricore shareholders receiving C$6.50 in cash and 0.509 shares of the combined company for each limited voting common share. Holders of Series A convertible preferred shares of Agricore would receive C$24 per share in cash.
Once the transaction is completed the new company will be called Richardson Agricore Ltd., with headquarters in Winnipeg. James Richardson & Sons, Ltd., the parent company of J.R.I., will be the majority owner of the combined company, with Ontario Teachers’ Pension Plan owning a significant minority stake.