Saskatchewan Wheat Pool has extended the deadline for its hostile takeover bid for Agricore United.
The deadline, which had already been extended once to March 6, was pushed back a second time to April 11.
The Pool didn’t announce any changes to its offer, which has been rejected as inadequate by AU’s board of directors.
Observers said the extension will give the Pool more time to assess the competing friendly offer from James Richardson International and to decide whether to sweeten its bid in response.
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Officials with the Pool declined to say whether an improved bid is in the offing.
“We’re curious to see what information comes forward from the AU-JRI circulars,” said Colleen Vancha, the Pool’s vice-president for investor relations.
“Right now we’re assessing our next steps with respect to that alternate transaction but there are no changes to our bid at this point.”
The extension will also give AU shareholders more time to consider their options, she said, and will allow for further consultations between the Pool and the federal Competition Bureau, which is reviewing the proposed transaction.
Analysts say the Pool’s current offer would provide AU shareholders with a total value of about $12.14 in cash and shares, while JRI’s bid would provide about $13.87 in cash and shares. The JRI offer includes more cash than the Pool’s, but less liquidity.
Brian Hayward, chief executive officer of AU, said the extension of the Pool’s bid doesn’t change anything.
“The extension was not accompanied by any change in the offer, so in that regard it’s exactly the same proposal that has been rejected by our board as being inadequate,” he said.
Archer Daniels Midland, which owns 28 percent of AU shares, has also rejected the Pool bid, which needs 75 percent of AU shares to be successful.
By contrast, AU is recommending approval of the JRI deal, and ADM is bound to support that recommendation unless it comes up with a superior offer of its own for AU.
Hayward declined to comment when asked if he expects the Pool to come back with a new improved offer.
JRI vice-president Jean-Marc Ruest said he was unconcerned by the extension of the Pool’s offer.
“Regardless of the existence of our offer, their situation is stalled to a certain extent, so I guess this gives them time to consider their options knowing that our offer is forthcoming.”
Ruest added that a detailed circular outlining the proposed combination will be sent to AU shareholders by the end of March. A circular from AU directors will be distributed at around the same time.
At that point, shareholders will be free to tender their shares to either offer.
Ruest said if all goes according to plan, the combination of JRI and AU, which also requires approval from the competition bureau, could be ready to go into business by the end of May or early June.
Vancha declined to say how many AU shares have been sold to the Pool so far.
“We’ve certainly seen activity and we continue to see shares being tendered to our offer,” she said.
