November 15, 2010

Agrium ready to acquire AWB

Canada's Agrium, which is offering US$1.2 billion to acquire the Australian Wheat Board (AWB), is likely to gain from a stronger business with less debt and a sustainable earnings profile, according to AWB managing director, Gordon Davis.

Agrium is to purchase the entire AWB's shares and performance rights for approximately AUD$1.50 (US$1.49) each in cash under the agreement.

AWB shareholders will gather in Melbourne on November 16 to consider the scheme of arrangement.

AWB directors have recommended together that shareholders vote in favour of the scheme without the presence of a superior offer.

Davis said that most objectives have been obtained to become a marketable company. "The whole global agricultural story, the Asian protein story, Australia's unique position, makes it no surprise that global companies are interested in Australian assets and Agrium, being a very good global operator, has put down a compelling offer."

Shareholders have to vote on the offer next week. Priced at AUD1.50 a share or a 37% premium to the company's closing price the night before the deal was announced, it has been supported by the AWB board and an independent expert.