Agrium bids $1.09 billion for AWB

by Eric Schroeder
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CALGARY, ALTA. — Agrium, one of the largest fertilizer producers in North America, has submitted a bid of $1.09 billion for Australian grain marketing organization AWB Ltd. At a per share price of $1.34, the offer represents a 57% premium to AWB’s trading price on July 29, before AWB agreed to merge with GrainCorp.

“The proposed transaction with AWB would continue Agrium’s strategy of growing its retail business,” said Mike Wilson, chief executive officer of Agrium. “Agrium sees significant potential to enhance the product and service offerings to the Australian and New Zealand grower, particularly through AWB’s retail Landmark Rural Services division, by utilizing Agrium’s international fertilizer and crop protection sourcing capabilities, while supporting further growth within each division of AWB.”

Agrium’s bid comes a little more than two weeks after GrainCorp Ltd. and AWB Ltd. entered into a merger implementation deed (MID) under which GrainCorp would merge with AWB. Under terms of their merger, GrainCorp said it would issue to AWB shareholders one GrainCorp share for every 5.75 AWB shares they own subject to an AWB shareholder vote. GrainCorp’s shareholders would hold 58%, and AWB shareholders 42%, of the merged company.

In an update posted on GrainCorp’s web site Aug. 16, Betty Ivanoff, general counsel and company secretary of GrainCorp, said, “GrainCorp notes that the Merger Implementation Deed between GrainCorp and AWB remains on foot and AWB directors have not withdrawn or modified their recommendation that AWB shareholders vote in favor of the merger with GrainCorp.”

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