CNS Canada — Plans are afoot to take publicly-traded Saskatchewan pulse and specialty crop processing firm AGT Food and Ingredients private.
AGT, in a release Thursday, said it has received a non-binding proposal from a senior management group, led by company CEO Murad Al-Katib, to acquire all its issued and outstanding common shares.
The proposal values AGT’s TSX-traded common shares at $18 each in cash, about a 37 per cent premium over Wednesday’s closing share price of $13.17, which was down $1.38 from Tuesday’s close. AGT shares closed Thursday at $17.76.
The proposal from the AGT management group — whose members today have combined control about 17 per cent of the company’s stock — also calls for investment firms Fairfax Financial Holdings and Point North Capital to retain their current combined stake of about 10.5 per cent.
The senior management team would also remain in their current positions with AGT once a transaction is completed.
AGT, in Thursday’s release, said its board has agreed to establish a committee of independent directors to consider the privatization proposal.
There is no timetable set for the independent committee’s review and AGT said it’s not planning to make any further public comment until the review is complete.
One of the company’s major stakeholders cautioned late Thursday it plans to vote against the management group’s proposal.
Letko, Brosseau and Associates, a Montreal investment management firm which says it has control of about 18.6 per cent of AGT shares, said in a separate release it believes the proposal “significantly undervalues” AGT.
The investment firm said it “remind(s) the company’s board of directors of its duty to consider the interests of all shareholders in reviewing the merits of this offer.”
AGT is a pulse and durum buyer, processor and exporter with locations around the world. The company has diversified in recent years, buying railways and increasing its food processing divisions.
AGT stock, which in May 2016 topped out at $42.05, has since generally fallen in value as trade issues have hit the pulse crop market, with India — Canada’s largest pulse buyer — having placed tariffs on pulse imports.
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.