Saskatchewan Wheat Pool’s latest bid to buy Agricore United has brought AU to the table.
The two grain companies held meetings last week to exchange confidential information, in the wake of the Pool’s sweetened bid of March 29.
It’s the first time the two companies have held face-to-face discussions since the Pool launched its hostile takeover bid Nov. 7.
The Pool’s new $1.6 billion offer provides substantially more value than a rival bid from James Richardson International, which AU’s board of directors recommended to shareholders in February.
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The Pool’s bid works out to $17.86 per AU share, while JRI’s is $13.79 per AU share.
AU’s board had rejected two previous bids by the Pool as inadequate, but a spokesperson said the latest offer merited further discussion.
“Our special committee looked at the offer as presented and decided it was worthy of a closer look,” said Radean Carter.
The company’s board of directors was to decide this week whether the Pool’s bid is superior to JRI’s.
If it finds that to be the case, then JRI would have five business days to match or exceed the Pool’s bid. If it matches it, then AU is bound by its agreement with JRI to recommend that bid to shareholders. If JRI chooses not to match the Pool bid and terminates its offer, AU must pay JRI a termination fee of $24 million.
Pool officials could not be reached for comment.
