At least five companies were vying for Viterra Inc. in the weeks leading up to the announcement that Glencore International was the successful suitor.
That information is contained in an information circular the company released May 4 to shareholders who will vote May 29 in Calgary on the $6.1 billion deal. Viterra’s largest shareholder, AIMCo, which owns 16.5 percent of the company, has already approved the deal.
The circular said Viterra recognized its attractiveness to other industry players and spent last year preparing for potential bids.
It retained financial and legal advisers and prepared assessments of possible buyers. It also identified “strategic alternatives available to enhance shareholder value.”
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The circular said several interested parties, including companies identified as Bidder 1 and Bidder 2, verbally approached Viterra chief executive officer Mayo Schmidt in late 2011 and early 2012 and asked about acquiring all or a large part of the assets.
Schmidt reported the events to the board but after consulting with advisers, the company did not pursue the potential deals because of price.
Schmidt met on Feb. 6 with the CEO of Bidder 2, who offered $14 to $14.50 per share, in cash, for all of Viterra’s common shares. Schmidt did not express interest in this proposal, said the circular.
Sixteen days later, he met with the CEO of Bidder 1, who offered $14 per share in cash.
Both, although unnamed in the document, are called potential strategic acquirers.
The Viterra board, along with financial adviser Canaccord Genuity, discussed the offers March 1 and decided they were financially inadequate. Viterra shares were trading at $10.32 at the time.
“Later, on March 1, 2012, Mr. Schmidt received an unsolicited approach from Glencore, who expressed interest in a change of control transaction at an unspecified price,” said the circular.
The bidding war began to heat up.
Within days Bidder 1, Bidder 2 and Glencore were working on revised proposals and a fourth company, Bidder 3, said it would also make a bid.
On March 6, the first three companies submitted their proposals. All were in the $14 to $14.50 per share range. At this time, Glencore confirmed it intended to sell certain assets to Agrium and Richardson.
The Viterra board authorized management to negotiate confidentiality agreements with Bidder 1 and Glencore, and asked Schmidt to contact a fifth company as a potential strategic bidder. That company said it would not pursue Viterra.
Trading of Viterra stock was halted March 9 to announce the company was talking to potential acquirers.
Another bidder, Bidder 4, came forward March 13 when Bidder 3 indicated it would partner with this company or any of the others as part of its bid.
Glencore increased its bid to $16.25 per share and on March 19 signed a 24-hour exclusivity agreement with Viterra.
The deal was concluded and the news release issued on March 20.
Meanwhile, an analysis of the deal by Informa Economics for the Saskatchewan government was due May 7.
Premier Brad Wall said May 7 he hadn’t yet seen the document but has said it will be released publicly.
