Everyone involved in merger talks between Alberta Wheat Pool and Manitoba Pool Elevators hopes the resulting company will be a traditional style co-operative.
But they also say it’s not guaranteed.
“We would like and we want to remain a co-operative at this point,” said Alberta Pool president Alex Graham. “However, as we do the economic evaluation we are going to look at all options and examine the pros and cons of each one.”
One option is to follow the example of Saskatchewan Wheat Pool and sell shares to the public.
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But senior pool officials and local delegates alike insist that would be a last resort.
“We don’t want to be a publicly traded company,” said Graham. “We want to be a co-operative.”
Manitoba Pool delegate Ken Sigurdson said there is no point in setting up another publicly traded co-op to compete with Sask Pool.
“The whole idea is to try to maintain a true co-operative option,” he said from his farm at Swan River.
A key issue will be the ability of a new company to raise capital to finance expansion into Saskatchewan, whether through acquisitions, joint ventures or new facilities.
That could be the determining factor in whether a new company is an old-fashioned or a new-fangled co-operative, said Manitoba Pool delegate Richard Lemoing.
The vast majority of MPE delegates who met in Brandon April 13-14 to discuss the merger issue said they want the company to remain a traditional co-op, but they recognize how crucial the issue of financing will be.
“Going to publicly traded shares would be our last choice, but it isn’t ruled out,” Lemoing said from his farm near Minnedosa. “If we could afford to finance in other ways we would.”
The two pools announced last week they would start formal merger discussions, with a goal of having a business plan ready by mid-summer. Most company officials say political will exists and they expect the talks to be successful.
The decision to proceed with talks was made after preliminary discussions aimed at a three-pool merger including Saskatchewan Wheat Pool were abandoned in the face of various differences.
Graham made it clear in an interview last week that he personally doesn’t want any new co-operative to follow the Sask Pool model.
“At the end of the day you can only represent shareholders, and if the majority of them are on Bay Street, that’s who you represent,” said Graham. “You have to make decisions relative to what’s in the best interest of shareholders, not necessarily what’s in the best interest of farmers, and they don’t always coincide.”
While Manitoba Pool delegates favor a traditional co-op approach, their counterparts at Alberta Pool have been “open-minded” on the issue of a public share offering, said Graham.
Delegate Arden Ziegler of Vegreville, Alta., said delegates go into the talks favoring the traditional co-op approach, but are prepared to look at a change in structure if necessary.
“We’ll deal with that when it comes along,” he said. “If a co-op looks good, fine. If not, we’ll look at something else.”
Sigurdson said any new company would stand a better chance of attracting business in Saskatchewan if it was a traditional co-op, noting that was a key feature of the pool’s unsuccessful bid to take over United Grain Growers last year.
Graham said the pools’ analysis indicates there is a desire among Saskatchewan farmers for a traditional co-op. But he also said that’s not enough.
“You can’t survive selling yourself as a co-op,” he said. “You still have to be competitive in the marketplace. The primary focus has to be on service and products.”
