S.W.P. to raise C$315.9 million in offering
April 13, 2007
by Eric Schroeder
REGINA, SASK. — The Saskatchewan Wheat Pool announced it will 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, will be used to help finance its hostile offer for Agricore United.
"The Pool has taken this final step to be in a position to put its very best offer in front of the Agricore board and having the proceeds from this offering available will allow us to achieve that goal," said Mayo Schmidt, president and chief executive officer.
Agricore United, Canada’s largest grain company, has 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 held James Richardson International Ltd., 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.
The S.W.P. deal is valued at C$1 billion based on its closing share price of C$9.06 at the Toronto Stock Exchange on April 12.
J.R.I., whose offer is estimated to be around C$831.2 million, would have five business days to match or beat the S.W.P. offer if Agricore determines the S.W.P.’s deal is better and agrees to accept it. Earlier this week the S.W.P. extended Agricore’s deadline to make a decision to April 25 from April 19.
"We are extremely pleased that the public market continues to be so supportive of a Pool-Agricore combination and we look forward to continuing our discussions with the Agricore board in order to finalize the terms of our offer," Mr. Schmidt said.
The S.W.P. previously raised C$100 million through a public offering in January, and last month announced another public offering of C$275 million.
It also raised C$125 million in January through a private placement with New York-based investment firm Third Avenue Management L.L.C., which owns about 19% of Saskpool.