WINNIPEG – Saskatchewan-based AGT Food and Ingredients Inc. announced in a news release on July 26 that it intends to privatize the company.
In the news release AGT said that it had received a non-binding proposal from a group led by Murad Al-Katib, president and chief executive officer 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 C$18 in cash and would represent approximately a 37 per cent premium over the closing stock price from July 25. AGT shares closed at C$13.17 on July 25, falling C$1.38 in value over the course of the day. After the privatization announcement on July 25, AGT stock rose in value and was sitting at C$17.80 per share as of 11:24 CDT.
The proposal states that Fairfax Financial Holdings Limited and Point North Capital Inc. will retain their equity interest in AGT. The current senior management team will remain in their current positions with AGT after the transaction completes.
The release also stated that the AGT board has agreed to establish a committee comprising of independent directors to consider the proposal and to conduct all aspects of the company’s response to the proposal. There is no time table 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 C$40 per share. Since then the stock has fallen steadily in value as trade issues have hit the pulse crop market, with India, Canada’s largest pulse buyer, having placed tariffs on pulse imports into the country.