Winnipeg, Manitoba
May 9, 2007
Agricore United
("AU") (TSX:AU) and Saskatchewan
Wheat Pool Inc. ("SWP") (TSX:SWP) announced today that AU
has agreed to support a revised all cash offer from SWP to
acquire all of the limited voting common shares of AU for $20.50
per share. Under the offer, 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.
On May 6, 2007, SWP submitted a
confidential proposal to the AU Board of Directors for the
acquisition by SWP of all of the limited voting common shares of
AU for $20.25 in cash. SWP advised AU that it was able to make
the increased offer as it had been in discussions with
James Richardson International
Limited (“JRI”) in respect of a sale to JRI of certain
assets currently owned by AU upon completion of the SWP offer
and had a tentative agreement with JRI for such a sale subject
to the agreement of AU. SWP also advised AU that it would not
make another offer on its own should the proposal not be
supported by the AU Board of Directors. SWP subsequently agreed
to increase the consideration offered to AU shareholders to
$20.50 in cash per limited voting common share in order to
obtain the support of the AU Board of Directors.
On May 9, 2007, the amended and
restated acquisition agreement entered into between AU and JRI
on April
19, 2007 (the “JRI Acquisition Agreement”), which provided for
JRI’s offer to acquire the limited voting common shares of AU at
a price of $19.25 per share, was terminated. JRI has also waived
its "right to match" the revised SWP offer. Accordingly, as per
the terms of the JRI Acquisition Agreement, AU will pay a
termination fee of $35 million to JRI. Additionally, JRI has
agreed to acquire certain AU grain elevator locations and crop
input centres throughout Manitoba, Saskatchewan and Alberta,
subject to regulatory approval. JRI will be provided with a
throughput agreement at the Cascadia Terminal in Vancouver and a
fertilizer supply agreement with Western Cooperative Fertilizer
Limited. The asset sale will occur following the acquisition of
AU by SWP pursuant to the revised offer.
The AU Board of Directors, based
on a recommendation from its Special Committee and after
consultation with AU's financial and legal advisors, has
unanimously determined that the revised SWP offer is fair to AU
shareholders and is in the best interests of AU and its
shareholders. AU’s financial advisors have each provided an
opinion to the Board of Directors and the Special Committee of
AU that the consideration under the revised offer is fair, from
a financial point of view, to AU shareholders.
"The revised SWP offer represents
an increase in the cash offered to AU shareholders under the
previous JRI transaction and a premium of almost 150 percent
over the value of the AU shares prior to the initial SWP bid on
November 7, 2006,” said Wayne Drul, Chair of the AU Board of
Directors. ”This revised all-cash offer from SWP also provides
certainty of value and reduced execution risk.”
SWP President and Chief Executive
Officer Mayo Schmidt said, “We have developed a comprehensive
and winning solution for Prairie agriculture and for our
respective shareholders. We can now move forward with momentum.
We are pleased to have the support of Agricore United’s Board of
Directors and are excited about the future opportunities that
will be available to drive additional value. Together, our teams
have the skills and resources to make this transaction a success
and we look forward to building a great Canadian agri-business
that we can all be proud of.”
Hartley Richardson, Chairman of
JRI said, “This is an excellent outcome for JRI and for the
shareholders of
Agricore United. This transaction enables JRI, which will remain
wholly owned by the Richardson family, to achieve its goal of
acquiring high quality facilities in strategic locations. These
outstanding assets will significantly increase the size of our
business and enhance our geographic presence, particularly in
Manitoba and Alberta. We want to thank the Ontario Teachers’
Pension Plan, as well as our employees, customers and Canada’s
farming communities for the extraordinary support they have
shown us over the past several months. This transaction will
complete the build out of our grain handling infrastructure and
significantly expand our crop input presence across Western
Canada. It will allow us to better serve our customers and
pursue our strategy of expanding our food processing,
nutraceutical and functional food business.”
The terms of the revised SWP offer
will be contained in a notice of change to the SWP offer and
circular, which will be mailed to AU shareholders in the coming
days. 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 by SWP and is not a condition of the SWP transaction. AU
shareholders are urged to read the documents to be issued by SWP
and AU in respect of the transaction when such documents are
issued. Such documents will be mailed to AU shareholders and
will be available at
www.sedar.com.
The AU Board has resolved to
recommend that AU shareholders tender their shares of AU to the
revised SWP offer. In connection with the transaction, AU
shareholders will be asked to approve the continuance of AU
under the Canada Business Corporations Act and the subsequent
completion of a plan of arrangement. The plan of arrangement
will provide for the acquisition by SWP of the shares of AU not
already acquired by SWP under the offer, on identical terms, to
be effected following expiry of the offer. Genuity Capital
Markets is the financial advisor to SWP. Scotia Capital Inc. and
Blair Franklin Capital Partners Inc. are acting as financial
advisors to the Special Committee and the Board of Directors of
AU. RBC Capital Markets is the financial advisor to JRI.
Update on James Richardson International Offer
As a result of the termination of
the JRI Acquisition Agreement, JRI has agreed to withdraw its
offer to acquire all of the outstanding limited voting common
shares of AU for $19.25 in cash and all of the Series A
convertible preferred shares of AU for $24.00 in cash.
Accordingly, AU shareholders should not tender their shares of
AU to the JRI offer and should ignore the circulars and related
materials dated May 2, 2007 sent to them by JRI and AU. AU
shareholders who have already tendered their shares to the JRI
offer should withdraw them immediately. For assistance, AU
shareholders are urged to contact Georgeson, AU's information
agent, toll free within North America at 1-866-598-9684.
Agricore United 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. Agricore United 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”.
Saskatchewan Wheat Pool Inc. is
a publicly traded agribusiness headquartered in Regina,
Saskatchewan. Anchored by a Prairie-wide grain handling and
agri-products marketing network, the Pool channels Prairie
production to end-use markets in North America and around the
world. These operations are complemented by value-added
businesses and strategic alliances, which allow the Pool to
leverage its pivotal position between Prairie farmers and
destination customers. The Pool's common shares are listed on
the Toronto Stock Exchange under the symbol SWP and its
subscription receipts under the symbols SWP.R, SWP.N and SWP.O.
James Richardson International
Limited, a subsidiary of James Richardson & Sons, Limited, 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. James Richardson & Sons, Limited,
established in 1857, is a privately-owned Canadian corporation.
Headquartered in Winnipeg, the firm is involved in the
international grain trade, real estate, energy, financial
services and investments.
RELATED RELEASE
Agricore
United supports Saskatchewan Wheat Pool's acquisition of
Agricore; Saskatchewan Wheat Pool agrees to sell certain assets
to James Richardson International
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Saskatchewan Wheat Pool Inc. |
