Agricore accepts Richardson takeover bid

There's been another development in the see-saw battle to buy Agricore United and it's good news forJames Richardson International.

Regina-based Saskatchewan Wheat Pool has been involved in a bidding war for Winnipeg-based Agricore, Canada's largest grain company.

On Thursday, Agricore announced it would accept an all-cash offer of $19.25 a share from James Richardson, another Winnipeg-based grain company.

That bidfollowed a sweetened offer made bythe Wheat Pool last week of$20 a share in cash, or 2.2076 Pool common shares, or some combination of cash and stock that would be subject to rationing.

At the time, Agricore had declared the Wheat Pool bid a "superior proposal" but said it would give James Richardson time to make a counter-offer.

Agricore is now tellingshareholders to reject the Wheat Pool offer in favour of the all-cash James Richardson bid.

The new Richardson-Agricore deal has been given the green light by the Agricore board of directors. The company says it expects the deal to be completed by June.

However, further twists and turns in the Prairie grain company saga are still possible.

Radean Carter, a spokeswoman for Agricore, said there's no reason the Wheat Pool can't make a better offer.

"The door is certainly open to it," she said.

Larry Weber, a Saskatoon commodity analyst, said people shouldn't count the Wheat Pool out yet. One advantage it has is that it has already received an analysis from the Competition Bureau and knows which assets it must divest itself of.

"The other thing the Pool has in their corner is that their president and CEO [Mayo Schmidt] has a wealth of experience dealing with a publicly traded company," Weber said.

In addition to getting approval from the Competition Bureau, the Agricore-Richardson deal has to be approved by 75 per cent of shareholders before it can go through.

Richardson will get $35M if deal falls through

On Thursday morning, the Wheat Pool issued a brief statement about the latest development: "The Pool is reviewing the announcement by the board of Agricore United and is assessing alternatives."

Ifthe latestproposalproceeds, the new company will be known as Richardson Agricore Ltd. and the Ontario Teachers' Pension Plan will own a "significant minority stake."

If the deal falls through, Agricore will have to pay James Richardson a $35-million termination fee. That's up from last month, when the termination fee was $24 million.

The Wheat Pool launched its initial takeover bid for Agricore with an offer worth about $1 billion in November 2006 and boosted its offer in January. Agricore turned down those offers, but warmed up to the Wheat Pool last month when the bid was sweetened with more cash.

Following the early Wheat Pool bid, Agricore arranged a friendly merger with James Richardson International Ltd.

Saskatchewan Wheat Pool is Canada's second-largest grain company. Agricore, which has major holdings in Alberta and Manitoba, is about twice the size of the Wheat Pool.

Agricore was formed when Agricore Co-operative merged with United Grain Growers in 2001.