AWB receives another takeover offer August 16, 2010 - 10:25AM
Grains marketer and rural services provider AWB has received an unsolicited takeover proposal from Agrium at $1.50 cash per AWB share.
The offer values AWB at about $1.23 billion.
In early trade, AWB shares rose as much as 2.5 cents, or 2.3 per cent, to $1.10.
AWB is already subject to a merger proposal from grains marketer GrainCorp.
Under the GrainCorp merger proposal, which will be implemented via a scheme of arrangement, GrainCorp will issue to AWB shareholders one GrainCorp share for every 5.75 AWB shares.
The Agrium proposal, which would be effected by scheme of arrangement, is conditional upon Agrium conducting limited due diligence with respect to certain financial and legal matters.
Implementation of the proposal would be subject to receipt of foreign investment approvals, removal of the 10 per cent shareholding cap under AWBs constitution and the negotiation of an implementation agreement.
The AWB directors advise shareholders that the Agrium proposal is conditional and subject to negotiation and may not lead to a definitive arrangement, AWB said in a statement.
Accordingly, at this stage, the merger implementation deed with GrainCorp remains on foot and AWB directors have not withdrawn or modified their previous recommendation that shareholders vote in favour of the merger with GrainCorp.
Canada-based Agrium said its proposal represented a 57 per cent premium to AWBs trading price of 95.5 cents per share on July 29, just prior to the GrainCorp merger announcement.
Agrium said its proposal was sent to the AWB board on August 14.
Agrium is in discussions with AWB with the intention of agreeing to a proposal that the AWB Board would recommend to its shareholders, Agrium said in a statement.
The proposed transaction with AWB would continue Agriums strategy of growing its retail business, said Agrium president Mike Wilson.
Agrium sees significant potential to enhance the product and service offerings to the Australian and New Zealand grower, particularly through AWBs retail Landmark Rural Services division, by utilising Agriums international fertiliser and crop protection sourcing capabilities, while supporting further growth within each division of AWB.
GrainCorp shares were 19 cents higher at $6.46.
Another Canadian-based agribusiness, Viterra, already has made a successful play in the Australian agribusiness sector, acquiring Australias ABB Grain Ltd for $1.6 billion in September 2009.
AAP
GNC Price at posting:
$6.45 Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)