Takeover
In November 2006, the company became the target of takeover bids from two other rival grain handlers: the Saskatchewan Wheat Pool ("SaskPool", "SWP") of Regina, Saskatchewan and Winnipeg-based James Richardson International ("JRI"). The initial and subsequent offers from SaskPool involved a stock swap, with no or little cash being offered, prompting the AU Board of Directors to reject them. In February 2007, AU and JRI announced that they had negotiated a merger arrangement to form a publicly traded company to be known as "Richardson Agricore", subject to shareholder agreement.
A subsequent bidding war led to a stock+cash offer from SaskPool and an all-cash offer from JRI to form a private company;[4] a higher, $20.50 all-cash offer from SaskPool in May eventually prevailed,[5] with 81% of the limited voting shares being tendered to the Pool by shareholders by the end of May, including all the ADM shares. This exceeded the 75% required by the terms of AU's incorporation to change the corporate structure and, after a special shareholders' meeting in June, AU became a wholly owned subsidiary of the Saskatchewan Wheat Pool.[6] AU's CEO, Brian Hayward,[7] resigned, as did the Board of Directors, and SaskPool's CEO and Board were voted in. SaskPool had Agricore United's common and preferred shares delisted from the Toronto Stock Exchange (TSX) on June 20, 2007, and the members of the senior management team for the amalgamated company were announced the next day.[8] As of June 29, no decision had been reached on the name or location of the new company, and it was expected to take about 12 months to complete the merging of the company's operations.
As a result of the acceptance of the SaskPool offer, JRI received a $35 million termination fee and was able to purchase a number of AU's grain and farm supply facilities; Cargill Canada was able to make a similar purchase, as part of a pre-merger deal width SaskPool to satisfy Canada's Competition Bureau. AU employees, along with the grain and farm supply inventories at the affected facilities, were transferred to the purchasing companies.[9]
It is generally believed within the Canadian agricultural industry that the biggest winners in the transaction were AU's shareholders, with SaskPool paying too much for AU, and that SaskPool gave up too many facilities to their competitors.[10][11][12] Substantial number of head office employees are expected to be laid off once the integration of the two companies is complete.
On August 30, 2007, the company formerly known as Agricore United ceased to exist and Saskatchewan Wheat Pool was rebranded to be known as Viterra.[13]
