Shareholder approval is all that remains to approve an all-shares deal proposed by grain industry stalwart Parrish & Heimbecker to buy out flour milling company Dover Industries Ltd.
Winnipeg-based P & H, which has been in the Canadian grain business for almost a century, already owns about 25 percent of the common shares in Dover, which operates flour mills in four provinces, including one in Saskatoon.
The offering price for the remaining shares is $19.25, a premium of 39 percent over their current value on the TSX.
John Heimbecker, chair of the special committee of P & H’s board, welcomed the deal.
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“P & H has been a shareholder and wheat supplier of Dover for many years. We are thrilled at the prospect of putting these two great companies together,” he said.
Lawrence Strong, chair of the finance committee for Dover, said he expected the deal to be approved at a special shareholder meeting scheduled for late January, unless a higher unsolicited bid by another party is received.
“Our expectation is that there would not be any material changes with the flour mills,” said Strong, who added that over the past five years Dover has bought three flour mills, including the Saskatoon operation.
All the mills are “quite profitable,” he said.
The death of controlling shareholder K.L. Campbell in May, who held 45 percent of the outstanding shares in Dover, precipitated the sale, said Strong.
The Saskatoon mill had been part of Saskatchewan Wheat Pool’s CSP Foods division. The mill was sold to Dawn Food Products in 2002 and then Dover in 2007.
