S.W.P. submits winning bid for Agricore
May 10, 2007
by Eric Schroeder
REGINA, SASK. — Saskatchewan Wheat Pool Inc. reached agreement with Agricore United to acquire all of the limited voting common shares of Agricore for C$20.50 ($18.51) per share. The transaction is valued at approximately C$1.8 billion ($1.625 billion). Agricore shareholders have until May 28 to tender their shares to the S.W.P.’s offer.
The announcement comes less than a month after Agricore agreed to sell its assets to James Richardson International Ltd. at a price of C$19.25 per share, and effectively ends a bidding war for Agricore that has lasted for several months.
In the end, it appears all parties involved will get what they want. As part of the transaction, the S.W.P. said it has agreed to sell select Agricore assets to James Richardson International Ltd. for C$255 million in cash, plus amounts related to inventory and other closing adjustments of approximately C$60 million. The transaction will include certain Agricore grain facilities and agri-products retail operations throughout Manitoba, Alberta and Saskatchewan, representing approximately C$40 million in annualized EBITDA.
In addition, the agreement sets the stage for the S.W.P. to follow through on its previously announced transaction with Cargill Ltd. to purchase Cargill’s partnership interest in the Cascadia port facility and to sell the S.W.P.’s Vancouver terminal and certain Agricore country assets.
"Today is an important event for Canadian agriculture," said Mayo Schmidt, president and chief executive officer. "We compete on a daily basis, but we are three distinct companies with an unwavering commitment to this industry. We have embraced a shared vision that we believe will improve the business of Canadian agriculture."