Bloomberg News

Viterra Halted After Report Minimum Bids Set at C$16

March 15, 2012

Viterra Inc. (VT), the Canadian grain handler that attracted Glencore International Plc as a potential suitor, was halted in Toronto after dealReporter said bidders were told they must offer at least C$16 ($16.13) a share to be allowed to assess the company’s internal data.

U.S. companies Archer Daniels Midland Co. (ADM) and Bunge Ltd. (BG) and Hong Kong-based Noble Group Ltd. (NOBL) are in the company’s so- called data room, dealReporter said today, citing a person familiar with the situation whom it didn’t identify. Baar, Switzerland-based Glencore, the world’s largest publicly traded commodities supplier, expressed an interest in Viterra, a person familiar with the situation said March 11.

Viterra climbed 9.1 percent to C$15.99 today before trading was suspended in Toronto. The stock has gained 46 percent since March 8, the day before Regina, Saskatchewan-based Viterra said it had received “interest from third parties.”

Viterra, Canada’s largest grain handler, reiterated last week that it will profit as the Canadian Wheat Board’s monopoly on purchasing wheat and barley in the country’s western provinces ends Aug. 1. Viterra forecast last week “significant” gains from next year, with annual earnings before interest, taxes, depreciation and amortization rising by C$50 million annually after 2014 as market share expands to close to 50 percent from 45 percent.

Takeover Estimates

Holly Gibney and Paul Tierney, Viterra spokesmen, didn’t immediately respond to telephone calls seeking comment.

David Weintraub, an ADM spokesman, said by phone the company doesn’t comment on rumors or speculation. Susan Burns, a Bunge spokeswoman, declined to comment in an e-mail. No one was immediately available to comment at Noble’s London office.

Cargill Inc., the closely held Minneapolis-based grain distributor, has also expressed interest in Viterra, the Wall Street Journal reported March 11, citing people it didn’t identify.

With estimates for the price of a Viterra takeover ranging from PI Financial Corp.’s C$14.40 a share, to C$18.50 a share from Raymond James Financial Inc., buyers still wouldn’t be paying more than 0.58 times revenue, according to data compiled by Bloomberg.

Viterra’s price-to-sales ratio of 0.46 on March 12 was cheaper than 74 percent of North American agricultural product wholesalers and food manufacturers with market values over $1 billion, data compiled by Bloomberg show. The group traded at an average of 1.02 times revenue.

To contact the reporter on this story: Shruti Singh in Chicago at ssingh28@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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