Bid for Agricore still alive, SaskPool says
Shareholders yet to vote on merger with JRI
Last Updated: Thursday, February 22, 2007 | 10:30 AM ET
CBC News
The Saskatchewan Wheat Pool is still interested in taking over Agricore United even though Agricore has announced plans to combine with James Richardson International Ltd. to form Canada's biggest grain company.
Wheat Pool vice-president Colleen Vancha said her company's latest offer is still on the table, but no decision has been made on whether to increase its value.
The Saskatchewan Wheat Pool is still hoping to take over Winnipeg-based Agricore United.
(CBC)
Vancha said the James Richardson deal still has to be voted on by Agricore United shareholders.
"We certainly believe that a Pool-and-Agricore combination provides superior value, and our bid remains active.
"We did know that Agricore United's board struck a special committee and were looking for alternate transactions, and obviously have come up with one. So we are just currently assessing their bid to see what it means to the transaction and to the process, and we'll move forward from here," Vancha said.
The special committee at Agricore recommended that shareholders accept the merger with James Richardson International (JRI).
But farmers are wondering what the deal means for them. While they welcome the idea of a strong, healthy Canadian grain company, they worry about reduced competition for their grain.
Bruce Osiowy is one farmer who doesn't think increased profits for grain companies automatically translate into a better deal for farmers.
"It's good for them to compete in a global market, but how much of that gets passed on to the producer? I'd have to see it to believe it," Osiowy said.
Saskatoon commodity analyst Larry Weber thinks the Agricore-JRI merger would be a good development.
"It's better to have a strong, vibrant industry that is actually making money rather than one that keeps churning out quarter after quarter [of] red ink," he said.
But, he said, it's far from a done deal and the Wheat Pool still has time to sweeten its offer.
Proposal sweetened
Under the Agricore proposal, its shareholders will get $6.50 in cash and 0.509 shares of the combined company for each of their shares. Holders of Agricore's Class A convertible preferred shares will get $24 in cash for each share.
When the Wheat Pool announced its bid for a merger with Agricore in November, it was mostly a stock swap, with the offer being 1.35 Pool common shares for every Agricore common share. It was also offering $24 for each preferred share.
In January, the Pool sweetened its proposal, offering either 1.36 Pool shares or $11.33 for each Agricore common share.
The Regina-based Saskatchewan Wheat Pool is Canada's second-largest grain company, while Winnipeg-based Agricore, which has major holdings in Alberta and Manitoba, is the largest.
Agricore was formed when Agricore Co-operative merged with United Grain Growers in 2001.
