Cargill Ltd. says it’s not going to get involved in the fight over the future of United Grain Growers Ltd.
“We’re on the sidelines on this one and we’re going to stay there,” said Barbara Isman, Cargill’s assistant vice-president of corporate affairs.
Asked if Cargill owns any shares in UGG, she said it’s company policy not to comment on specific trading transactions. She also declined comment on whether Cargill might take an ownership stake in UGG in the future.
“This is a very fluid situation that I don’t think has played itself out completely,” she said.
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There has long been speculation in the grain industry that a U.S.- owned grain firm like Cargill, ConAgra, Continental or ADM might make a takeover bid for UGG in order to gain access to supplies of Canadian grain.
Stop foreign takeover
When Alberta Wheat Pool and Manitoba Pool Elevators first announced they had taken a stake in UGG, they said it was to block any such foreign move and keep the company in Canadian hands.
Some stock market analysts were still speculating last week that a foreign-owned company might yet enter the fray and top the pool’s offer to UGG shareholders of $13.75 a share.
Isman said it’s too early to talk about how a successful takeover by the pools might affect Canadian operations. It would depend on number and location of elevators operated by the new company.
“It really is difficult for us at this point to do anything other than attempt to do the best job we can for our own customers and that’s it,” she said.
While describing the pools’ bid for UGG as startling, she added it’s understandable in the context of the pools being concerned about their place as relatively small players in an increasingly deregulated, borderless grain industry.
Asked if farmers are better served by having more grain companies competing for their business, Isman said it depends in part on whether the companies are financially strong.
