Viterra to raise US$378 million for ABB acquisition

Canadian agribusiness Viterra is looking to raise C$450 million (US$378 million) in equity through a private placement to help pay for its planned acquisition of Australian grains company ABB Grain.

Proceeds of the offering will provide a portion of the funding that may be required should Viterra decide it will go ahead with the acquisition of shares of ABB Grain, Viterra said.

Viterra and ABB are currently engaged in continuing negotiations and due diligence activities, and the move is meant to put Viterra in a position to act quickly if the negotiations result to a transaction, according to Viterra chief executive Mayo Schmidt.

Viterra said it will raise the US$378 million in equity via a bought deal subscription receipt offering at C$8 (US$6.7) per subscription receipt. Each receipt represents the right of the holder to receive, at no extra cost, one Viterra share upon the acquisition closing of ABB Grain.

If the acquisition does not occur, holders will receive a refund of the purchase price.

ABB Grain said Tuesday (Apr 28) it had received a conditional and non-binding proposal from Viterra to acquire all ABB shares via a scheme of arrangement. The proposal was within the range of A$9 (US$6.3) to A$9.50 (US$6.7) per ABB share and comprised a mix of cash, Viterra shares and franked dividends, said ABB.

The proposal values ABB at between A$1.55 billion (US$1.13 billion) and A$1.64 billion (US$1.2 billion).