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Viterra confirms exclusive acquisition talks

By Caroline Scott-Thomas , 20-Mar-2012
Last updated the 20-Mar-2012 at 11:36 GMT

Canadian agribusiness firm Viterra has confirmed it is in exclusive discussions with a third party about a possible sale, after trading of its shares was halted on the Toronto stock exchange on Monday.

The company has been the target of a bidding war, with rumored potential buyers including Glencore, Archer Daniels Midland (ADM) and Bunge, although Viterra has not confirmed these companies as potential suitors. However, Bloomberg has reported that Glencore International, in coalition with Canadian firms Agrium, Inc and Richardson International, is nearing a deal, citing three anonymous sources.

Last week, Viterra said it had set up a process to review potential bids and acknowledged media reports suggesting a sale price of up to C$16.11 per share, which would value the company at nearly C$6bn.

In another statement released on Monday, the company said: "Viterra confirms that it has begun exclusive negotiations with a party and the basis of this exclusive negotiation is at a price which is consistent with our previous statement."

It also cautioned investors that there could be "no assurance that an agreement will result or that a transaction will occure and that if one does occur, there can be no assurance at what price it will be completed."

Following the announcement, Viterra's shares closed at C$15.97 on Monday, down from a three-year high of C$16.09 late last week. The flurry of interest in the company began after Viterra said it expected to significantly increase its earnings when Western Canada grain producers gain the ability to market their wheat, durum and barley to buyers of their choice, other than the Canadian Wheat Board, from August 1 this year.

The company expects to start realizing “modest benefits” from the fourth quarter of this year, and more significant benefits in 2013, and annual EBITDA is anticipated to increase by $40m to $50m per annum from 2014, it said.

Viterra said it would make a further announcement "if appropriate".

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