Farmers, employees, shareholders and analysts are watching and waiting to find out who is behind a takeover bid for Viterra Inc.
A statement issued by Viterra during a halt in trading March 19 didn’t say whether that party was a single company or a group.
“Viterra confirms that it has begun exclusive negotiations with a party and the basis of this exclusive negotiation is at a price which is consistent with our previous statement,” the company said.
Speculation settled on some type of bid by the Glencore-Agrium-Richardson alliance that emerged last week in media reports.
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Bloomberg quoted three unnamed sources in an article who said the Swiss-based Glencore International PLC, Calgary-based Agrium Inc. and Winnipeg-based Richardson International Ltd. were close to a deal with Viterra.
“Viterra cautions investors not to rely on these press reports as there can be no assurance that an agreement will result or that a transaction will occur and that, if one does occur, there can be no assurance at what price it will be completed,” the statement also said.
Shares closed at $15.97 March 19 on trading of more than 21.5 million shares, down from the $16.21 high close March 16. That put the company’s value at $5.94 billion.
A successful bid could see Viterra’s assets carved up.
That leaves Viterra employees wondering where they might fit.
Hugh Wagner, general secretary of the Grain and General Services Union that represents them, said many have been through the uncertainty before, when Saskatchewan Wheat Pool took over Agricore United to form Viterra. But this time Viterra is the prey, he noted.
“I would suggest there is a very heightened sense of tension and upset,” he said in an interview. “People are worried about their livelihoods, both at the Regina head office and in the countryside.”
At head office, there are 200 unionized and 200 non-unionized employees. If a takeover proceeded, Glencore would need a Canadian office presence but the other two companies already have them, Wagner said.
Saskatchewan premier Brad Wall said head office presence would be an important consideration when his government examines a potential offer and its net benefit to the province.
According to a management information circular issued in February, Schmidt would be paid $3.43 million in salary, $3.66 million in short-term incentives and $6 million in share units if he is fired without cause within a year of a takeover.
Last year he made $5.2 million in salary and bonuses.
Fran Malecha, chief operating officer of the grain group, would receive $4.5 million, Rex McLennan, chief financial officer, would get 3.5 million, and Don Chapman, senior vice-president of international grain, $2.5 million.
All would also be entitled to stock options in various amounts, and outplacement and relocation costs.
