Viterra wins support on acquisition of ABB

ABB Grain's major shareholder has declared support for the proposal to combine with Canadian agribusiness Viterra.

Amit Wadhwaney, portfolio manager at US-based Third Avenue Management, which controls 9.05 percent of ABB, said grower shareholders would get a far less risky and potentially more profitable entity if they owned a combined company.

ABB will always be subject to local weather patterns but the combination will free ABB from that problem and would benefit growers, particularly those exposed to the weather patterns and who would like to diversify, according to Wadhwaney.

This emphasises the view that ABB's international shareholders, many of which are also major holders of Viterra, will back the transaction.

Viterra's offer has also won the support of most of ABB's board, subject to due diligence, according to the Australian Financial Review.

ABB Grain 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).