Saskatchewan-based AGT Food and Ingredients Inc. has said it intends to privatize.
The company announced in a July 26 news release that it had received a non-binding proposal from a group led by Murad Al-Katib, president of AGT, to privatize the company. Under the proposal, the group would acquire all the issued and outstanding common shares of AGT.
Each common share would be worth $18 in cash and would represent approximately a 37 percent premium over the closing stock price from July 25. AGT shares closed at $13.17 July 25, falling $1.38 in value over the course of the day. After the privatization announcement, AGT stock rose in value and was sitting at $17.80 per share as of noon July 26.
The proposal states that Fairfax Financial Holdings Ltd. and Point North Capital Inc. will retain their equity interest in AGT. Members of the senior management team will remain in their positions with AGT after the transaction completes.
The release also said that the AGT board has agreed to establish a committee of independent directors to consider the proposal and to conduct all aspects of the company’s response to the proposal.
No timetable has been set for the independent committee’s review, and AGT is not planning to make any further public comment regarding the news until the review is complete.
AGT shareholders were instructed in the news release that they do not need to take any other action and should await news from the independent review.
AGT is a pulse and durum buyer, processor and exporter with locations around the world. The company has diversified in recent years by buying railways and increasing its food processing divisions.
AGT stock has been dropping in value over the past year. The stock hit a market high in May 2016, when it was valued at more than $40 per share. Since then the stock has fallen steadily in value because of trade issues, primarily with India.