Like gophers constantly on the lookout for predators, many small, farmer-owned grain terminals have learned to be extra vigilant these days.
That’s why some smaller terminals have introduced poison pills to discourage hostile takeover bids.
Weyburn Inland Terminal was first. It passed a shareholders rights plan in November 2009. It was followed by Prairie West Terminal of Plenty, Sask., in July 2010.Finally, Great Sandhills Terminal of Leader, Sask., implemented a similar plan this month.
Officials with all three companies say their plans were not introduced in response to a specific unsolicited takeover threat, but are seen as prudent.
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“It’s a reflection of the current business environment that’s out there,” said Jim Major, chief executive officer of Great Sandhills.
“We’ve seen two or three smaller independent companies taken over by larger firms in Canada and elsewhere, we see what Viterra has done and what’s going on with Potash Corp.”
He said his company, along with Prairie West and Weyburn Inland are all profitable, well-established firms with solid customer bases, and are undervalued, making them attractive targets for takeover bids.
Andy Travers, chief executive officer of Prairie West, said it makes sense to be prepared.
“The plan was put in place as a proactive measure for the future,” he said.
Details of the three companies’ plans differ slightly, but they are all based on triggering changes in share structure and value in the event of an unsolicited takeover bid, which would give shareholders and company officials more time to respond.
“It gives the board time to identify, develop and negotiate value–enhancing alternatives to ensure the fair treatment of our shareholders,” said Wayne Hittel, chair of Great Sandhills.
All three companies are independent, shareholder companies owned mainly by farmers with no links to large grain firms. The other inland terminals are all linked to major grain companies, which hold an ownership stake.
