Saskatchewan Wheat Pool Inc., Canada's second-biggest grain handler, said it plans to make an unsolicited offer for bigger rival Agricore United to cut costs and improve efficiency.Saskatchewan Wheat Pool is offering 1.35 of its shares for each Agricore share, Regina, Saskatchewan-based Wheat Pool said today in a statement. The offer values Agricore at C$9.33 a share, or C$423.8 million ($375 million), a 13 percent premium to Winnipeg-based Agricore's last-traded price.
``This is an offer to have a discussion with Agricore about a combination of the two companies,'' Schmidt said on a conference call with investors. ``Our goal is to operate the most efficient grain handling operation to port.''
Under the proposed transaction, Agricore shareholders would own about 47 percent of the company with an estimated market value of C$1.2 billion and combined revenues of C$4.3 billion, Schmidt said. The proposal includes a cash offer for each Agricore preferred share.
``This combination would begin to deal with some of the overcapacity'' in grain handling in Western Canada, Schmidt said, suggesting the combination would generate cost ``synergies'' of C$60 million. He said grain handlers have about a quarter more capacity than required by farmers.
Discuss!
Works for me and anyone else holding shares of Agricore! :)
Current: 10.24/share
Yesterday's close: 8.24/share
Change: +24%
Ya me!
Monopolies are bad, 'anti combines legislation' time.
Same problem Mark Steyn was having with his book.
Mayo wants agricore, now theres a switch, earlier he would have nothing to do with it, wanted no part of it.
Why the change of heart? Lets think of some reasons possible.
1)Mayo is bored
2)Mayo is going down with his ship(loss of market share to Agricore).
3)Mayos ego wants to run a larger ship
4)Stephen Harper is beginning to mess up Mayos sandbox and soon farmers wont need Mayo and will be able to sell directly to end user and Mayo will be history.
5)Mayo not good at building his own company so will buy what Agricore has built over the years.
6)This new enterprise will be Mayos crowning glory, after all Mayo is getting up there in age, this will be his last kick at the can.
7)Agricore is the only play available on the prairies, this is Mayos only possible play.Agricore, name your price,Mayo wants you and will pay anything to get you, your the only play that exists.
Ain't going to happen!
If there was this kind of concentration in any other industry in Canada, say, for instance, oh, I dunno, _banks or oil_, the s*** would hit the fan, it would never be allowed. The agriculture industry is somehow immune from criticism.
mayo suggests over capacity.... thats probably why i still have 35000 bushel of grain piled on the ground, right. the distruction of the rural elevator system has passed all the storage needs back to the farmer and with the inefficient combination of the railways, the wheatboard and the line company's farmers continue to pay for no service .
Well without a wheatboard, we'll need some big companies in order to market Wheat and Barley internationally....
Yeah, "Idiots", it's the reason that millions of tonnes of Canola sits rotting at the sides of Saskatchewan fields every year. No Canola Board to sell it for the poor dusty rubes.
The merger would surprise me if it went through. I don't think the offer is high enough to attract sufficient interest. SWP's offer strikes me as being made from a position of weakness, not strength.
Over capacity indeed! I was in Ontario and the wheat was yielding 125 bus per acre and lots of the farmers have no on farm storage and looked at me as if I were stupid to have as much as I do.There used to be lots of elevator storage in Western Canada but the CWB and "orderly marketing" stopped that.If you dont believe me,take a look at the pics of the towns in the early days with the rows of grain elevators.
Sask wheat pool doesn't have a pot to pee in or a window to throw it out! Five years ago they couldn't sell off stuff fast enough to pay off their debt. Talk to some of the old folks and see what's left of their original equity or shares. Four or five years ago, if you bought fertalizer from pool you had to pay for it up front because they couldn't get credit! So all of a sudden their going to make a bid for agricore? not without some crooked cra* happening in the middle their not! Bring on dual marketing or get rid of the w.b altogeather so i don't have to use it! (like my eastern buddys). As for needing a big co. to market our grain...i've been marketing canola, flax, peas, carnary, mustard etc. for years without the help (waste) of the wb.
Well, one big happy grain company wouldn't need the clout of the CWB, I guess, but the way SWP has been run, I'd be afraid. Very afraid. The reason there's no storage in Western Canada? SWP decided not to retain it and build large inward terminals that abandoned small towns and farmers and requires lots of travelling by truck instead. While, I too, can't see how they can pull this off, I wouldn't let SWP's brain dead brain thrust run a garbage dump.
Well, one big happy grain company wouldn't need the clout of the CWB, I guess, but the way SWP has been run, I'd be afraid. Very afraid. The reason there's no storage in Western Canada? SWP decided not to retain it and build large inward terminals that abandoned small towns and farmers and requires lots of travelling by truck instead. While, I too, can't see how they can pull this off, I wouldn't let SWP's brain dead brain thrust run a garbage dump.
“it's the reason that millions of tonnes of Canola sits rotting at the sides of Saskatchewan fields every year.”
Not one to cross the line in the stubble too often, I was going to say ”What the heck goes on there?”
Then my sarcasm o meter kicked in.
Newco name,
What would Mayo call his new company?
His letter head could have a picture of Mayo and a Halo over his head.
Mayo the great savior of the prairie farmers.
Can you feel his love.
Mayo loves you, hes looking out for your best interests...pleeeze... excuse me while I puke.
Newco name,
What would Mayo call his new company?
His letter head could have a picture of Mayo and a Halo over his head.
Mayo the great savior of the prairie farmers.
Can you feel his love.
Mayo loves you, hes looking out for your best interests...pleeeze... excuse me while I puke.
All agricore would have to do to stop me from selling my grain to them is to put POOL on the side of their terminals. But if a POOL elevator painted Agricore United on its side that would be worth thinking about.
I know it's not the same thing, but this reminded me of when the Pool was throwing money around like drunken sailors, buying donut shops and what have you. They got into a pissing contest with a then smaller Agricore over Humboldt flour mills, offering a share premium so absurd that Agricore walked away. Most of those assets weren't worth anything. It was all about who could piss further and the Pool would hear nothing of a merger. This looks to me like a desperate move by a company on its way out.
As an ex-employee-shareholder, Pool is dead to me. They took every dollar we were encouraged to invest and turned them into nickles. To Hades with them. And if I meet Don Loewen or Bill Hunt, I'll spit in their faces.
Dose that mean were on SHERMANS PLANET and we will be getting a tribble free load of quadrotrikiikalli? SOME ONE CONTECT DEEP SPACE STATION K-7
most of the anti SWP ranters are talking about the company as it was several years ago. They've got rid of all the garbage, donut shops, elevators in Mexico and Poland. It was the dumb clucks of farmers who let it all happen and Mayo was brought in to clean up the mess and save the company.
Grain companies come, and they go. The CWB came and it may go. The difference in the Farmer's pocket is mere change. One year X is better, the next ....
But what made a real big difference, as in a $Million$, or so, to EACH Farmer, was the Crow Rate Subsidy. Introduced in the 1930s, eliminated in about 1997. Was supposed to be forever but too many Farmers wanted it canned.
What was it worth to a, say thousand acre farmer, during the last 4 decades of its life ?? About a Million Dollars !!! Pretty hard to replace that kind of money with a dollar or two better basis. And even that may be + or - depending on the year. Pocket change in comparison.
So, it was the farmers who wanted the crow rate cancelled. Gee, who knew!!! No, it was the federal gov. that wanted it cancelled not farmers mr. b a hoax. and it was not only on grain but everthing from grain to lumber.
As for the western communist wheat board being so good, well, thats why you see the eastern boys bustin down the doors to get in the damn thing.
Mayo fix it, here's a suggestion for ya. If this goes through, and God forbid it does, then sell your shares or you will be like ma and pa farmer with their equity turned to shares..busted... or like the x employee stated above, took his dollars and turned them into nickles. Why do i say that....because my truck, for one, will never darken their doors thats why!
So, it was the farmers who wanted the crow rate cancelled. Gee, who knew!!! No, it was the federal gov. that wanted it cancelled not farmers mr. b a hoax. and it was not only on grain but everthing from grain to lumber.
As for the western communist wheat board being so good, well, thats why you see the eastern boys bustin down the doors to get in the damn thing.
Mayo fix it, here's a suggestion for ya. If this goes through, and God forbid it does, then sell your shares or you will be like ma and pa farmer with their equity turned to shares..busted... or like the x employee stated above, they took his dollars and turned them into nickles. Why do i say that....because my truck, for one, will never darken their doors thats why!
when the Crow rate was cancelled it was recommended that the farmers and the infrastructure be paid thirteen billion dollars.Mulroney offered seven billion and the Pool and the NDP said it wasnt enough.They finally settled for a billion and a half.
The radical eco-fanatics of GREENPEACE or EARTH FIRST would rather see starvation becuase their so convinced of overpopulation becuase they have read PAUL EHRLICHS junk science books THE POPULATION BOMB and THE POPULATION EXPLOSION