AWB backs A$1.2-bn takeover by Canada's Agrium
24 August 2010
AWB, Australia's wheat exporter today decided to terminate the A$855 million merger offer from local rival GrainCorp and instead back the lucrative A$1.2-billion bid by Canada's agribusiness giant Agrium Inc.
AWB announces that the board has today unanimously recommended that in the absence of a superior proposal and subject to the independent expert opining that the scheme is in the best interests of AWB shareholders, shareholders vote in favour of the scheme with Agrium,'' said AWB in a statement.
''As a consequence, the AWB Board has withdrawn its previous recommendation of the merger with GrainCorp Limited and will terminate the merger implementation deed between AWB and GrainCorp, it added.
Calgary, Alberta-based Agrium, a major retail supplier of agricultural products and services in North and South America, made an unsolicited proposal on 16 August 2010 to acquire AWB at A$1.50 per AWB share, representing a 57 per cent premium to AWB closing price of A$0.955 on 29 July 2010. (See: Canada's Agrium makes A$1.2-bn counter offer for Australia's AWB)
Agrium's offer trumped Sydney-based GrainCorp's 31 July 2010 bid of A$855 million for AWB, a premium of 9 per cent to AWB's 28 July closing price. (See: GrainCorp to buy AWB to become Australia's largest wheat exporter)
AWB chairman, Peter Polson said that the AWB board believes this transaction represents better value for shareholders, ''Agrium's extensive experience in crop inputs and range of products, and commitment to the grain handling business, can only help to better serve our customers,'' said Polson.
Founded in 1931 as Cominco Fertilizers Ltd, and changed its name to Agrium in 1995, the Calgary, Alberta-based company is a major retail supplier of agricultural products and services in both North and South America and a leading global producer and marketer of agricultural nutrients and industrial products.