(Resource News International) — Grain handler Viterra’s proposed merger with ABB Grain has “compelling benefits” for producers in Australia and Canada, a Viterra spokesperson said last week in response to charges from an Australian farm group that the bid is not in producers’ best interests.
The South Australian Farmers Federation (SAFF) on May 22 voiced its opposition to the merger of the Canadian and Australian agri-businesses on the basis that Viterra’s bid was neither high enough nor in the best interests of growers.
Viterra offered ABB Grain between A$9 and A$9.50 per share in a non-binding bid that includes cash, stock and dividends.
The influential Australian farm group may hold sway over the 46 per cent of ABB Grain shareholders who are or were producers. In order to move ahead, Viterra’s bid requires approval from 75 per cent of ABB shareholders. The shareholders would also need to overturn a 15 per cent shareholder cap clause in its constitution.
In the interest of competition and efficiency, SAFF grains council chairman urged ABB Grain shareholders not to allow the removal of the current 15 per cent cap on voting shares unless “fundamental changes” take place.
SAFF called for the sale of the port at Port Adelaide Outer Harbour, the availability of information concerning stocks, sales, shipping and warehousing, an independent operation of the shipping stem and monitoring of port pricing.
Asked to respond to SAFF’s comments, a spokesperson for Regina-based Viterra noted ABB’s board of directors, which includes four Australian growers, unanimously recommended that ABB shareholders vote in favour of the proposal.
“We believe our offer provides significant value to ABB shareholders including a substantial premium on their shares, the establishment of a centre of excellence for malting barley and malting research in Adelaide and an investment in grower education and training to enhance farm business management skills, marketing expertise and best practices among Australian growers,” the Viterra spokesperson said.
As for SAFF’s concerns about port practices and access, “Regulatory matters concerning port access are unrelated to this transaction. Our focus is on combining two great companies,” the Viterra spokesperson said.