Winnipeg, Manitoba, Canada
April 19, 2007
Agricore United
("AU") (TSX:AU) and James Richardson
International Limited ("JRI") announced today that AU has
accepted JRI's offer to match the proposal made by Saskatchewan
Wheat Pool ("SaskPool") on April 13, 2007 under the previous
acquisition agreement between AU, JRI and James Richardson &
Sons, Limited ("JRSL"). The revised offer is an all-cash offer
for 100 percent of the limited voting common shares of AU at a
price of $19.25 per share. Holders of Series A convertible
preferred shares of AU will receive $24.00 in cash per share
(plus accrued and unpaid dividends). The transaction has a total
enterprise value of approximately $1.8 billion.
In making this decision, the AU Board of Directors, based on a
recommendation from its Special Committee, chose to accept JRI's
matching proposal rather than a proposal that JRI submitted
together with a signed irrevocable lock-up agreement and letter
of support from Archer Daniels Midland Company ("ADM"). Under
that proposal, JRI offered to purchase each outstanding limited
voting common share for $20.00 in cash. ADM is AU's principal
shareholder, holding approximately 28 percent of the outstanding
limited voting common shares. This proposal was conditional upon
AU releasing ADM from its obligations under the existing
standstill agreement between AU and ADM in order to allow ADM to
irrevocably agree to tender all of its limited voting common
shares to this proposal and not support another transaction for
a period of time following the expiry of the JRI offer. The
lock-up agreement would not be effective unless AU provided its
consent. The Board determined that it was not in the best
interests of AU in the circumstances to consent to an
irrevocable lock-up agreement between JRI and ADM that would
effectively rule out a subsequent bid.
The proposed transaction between AU and JRI has been approved by
the AU Board of Directors. The acquisition agreement includes
customary non-solicitation and fiduciary out provisions,
including a termination fee of $35 million, payable to JRI in
certain circumstances. The transaction is expected to be
completed in June 2007.
Hartley Richardson, Chairman of JRI, said, "We are pleased to be
presenting an all-cash offer to the shareholders of AU. This
offer represents a significant premium to our previous cash and
share offer. It provides certainty of proceeds and reduced
execution risk for AU shareholders, as compared to the uncertain
value of SaskPool's cash and share offer."
Upon completion of the transaction, the combined company will be
called Richardson Agricore Limited and will be a private company
headquartered in Winnipeg. JRSL, the parent company of JRI, will
be the majority owner of the combined company, with Ontario
Teachers' Pension Plan owning a significant minority stake. The
Board of Directors of the combined company will be chaired by
Hartley Richardson and will include two producer
representatives.
The combination of AU and JRI will result in significant
benefits for customers. The new company will be financially
strong and will continue to be a dependable provider of
innovative and cost-effective services and products to farmers,
while enhancing its presence in the global market for Canadian
grains and oilseeds. The combined company will be able to draw
upon the resources and experience within each of AU and JRI to
deliver greater value to farmers.
JRI also said it expects to conclude an agreement shortly with
the Competition Bureau that would address any concerns regarding
a combination of JRI and AU.
The Board of Directors of AU, based on the recommendation of the
Special Committee of the Board of Directors, has determined that
the amended JRI transaction is fair to AU shareholders and is in
the best interests of AU and will recommend that shareholders
accept the offers from JRI. AU's financial advisors, Scotia
Capital Inc. and Blair Franklin Capital Partners Inc., have each
provided an opinion to the Board of Directors and the Special
Committee of AU that the consideration under the offer is fair,
from a financial point of view, to AU shareholders.
The terms of JRI's offer will be contained in JRI's bid
circular, which will be mailed to AU shareholders in the coming
weeks. The offer will be subject to certain conditions,
including the tender of at least 75 percent of the outstanding
limited voting common shares. Financing for the transaction has
been secured and is not a condition of the offer.
AU will call shareholders meetings to approve the continuance of
AU to the Canada Business Corporations Act ("CBCA") and the
subsequent completion of a plan of arrangement under the CBCA
providing for the acquisition by JRI of the shares of AU on
terms identical to the offer, to be effected following expiry of
the offer.
AU shareholders are urged to read JRI's bid circular and AU's
directors' circular and management information circular in
detail when such documents are issued. Such documents will be
mailed to AU shareholders and will be available at
www.sedar.com.
RBC Capital Markets is the financial advisor to JRI. Scotia
Capital Inc. and Blair Franklin Capital Partners Inc. have been
retained by AU to act as financial advisors to the Special
Committee and the Board of Directors of AU.
Update on Saskatchewan Wheat Pool Offer
The AU Board of Directors maintains its recommendation that
shareholders reject the SaskPool offer and not tender their
shares to that offer. AU shareholders who have already tendered
their shares to the SaskPool offer should withdraw them
immediately. For assistance in doing so, AU shareholders are
urged to contact Georgeson, AU's information agent, toll free
within North America at 1-866-598-9684.
About Agricore United
AU is one of Canada's leading agri-businesses with headquarters
in Winnipeg, Manitoba and extensive operations and distribution
capabilities across western Canada, as well as operations in the
United States and Japan. AU uses its technology, services and
logistics expertise to leverage its network of facilities and
connect agricultural customers to domestic and international
customers and suppliers. The company's operations are
diversified into sales of crop inputs and services, grain
merchandising, livestock production services and financial
services. AU's limited voting common shares are traded on the
Toronto Stock Exchange under the symbol "AU".
About James Richardson International Limited
JRI, a subsidiary of JRSL, is the largest privately-owned
Canadian agribusiness. It handles all major grains, oilseeds,
and special crops and sells crop inputs and related services
through farm service centres throughout Canada. JRI, which has
1100 employees, is also actively involved in food processing
through its subsidiary Canbra Foods Ltd. It has a strong history
of growth and profitable operations.
JRSL, established in 1857, is a privately-owned Canadian
corporation. Headquartered in Winnipeg, JRSL is involved in the
international grain trade, real estate, energy, financial
services and investments.
About Ontario Teachers' Pension Plan
The Ontario Teachers' Pension Plan is an independent corporation
responsible for investing the $100 billion fund and
administering the pensions of Ontario's 274,000 active and
retired elementary and secondary school teachers. Approximately
40 percent of the fund is invested in public equities. As a
long-term investor in Canadian stocks, the Ontario Teachers'
Pension Plan's public equity division features a Relationship
Investing team, whose mandate is to manage large-scale strategic
investments in public companies. |
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