On November 7, 2006, Saskatchewan Wheat Pool (SWP) announced its intention to make an unsolicited bid for United Grain Growers Limited, carrying on business as Agricore United (AU). The initial SWP bid contemplated the acquisition by SWP of all of the outstanding limited voting common shares of AU in exchange for 1.35 SWP common shares per AU share and all of the outstanding Series A convertible preferred shares of AU for $24 in cash plus accrued and unpaid dividends.
AU's board of directors formed a special committee that reviewed and rejected SWP's initial offer. On February 21, 2007, AU announced that it had signed a support agreement with James Richardson International Limited (JRI), pursuant to which AU's board of directors agreed to recommend that AU shareholders accept a rival bid from JRI.
SWP continued to pursue its offer for AU and on March 28, 2007, announced that it had entered into an asset purchase agreement with Cargill Limited, pursuant to which SWP agreed to sell nine AU country grain-handling and marketing facilities and one Vancouver port terminal following an acquisition by SWP of AU to address issues identified by the Competition Bureau.
On May 9, 2007, SWP and AU announced that they signed a support agreement, pursuant to which AU's board of directors agreed to support a revised offer from SWP for a consideration of $20.50 in cash per limited voting common share. On the same day, SWP announced that it entered into an asset purchase agreement with JRI, pursuant to which JRI agreed to terminate its outstanding offer for AU and to purchase certain AU grain facilities and agri-products retail operations following an acquisition by SWP of AU.
On May 29, 2007, SWP announced that its offer for AU had been successful and it proceeded to take up approximately 81.6 per cent of AU's outstanding limited voting common shares and 49.4 per cent of AU's outstanding Series A convertible preferred shares. SWP acquired the remaining AU limited voting common shares that were not already owned by SWP through subsequent take-ups and pursuant to a plan of arrangement involving SWP and AU, among others, on June 15, 2007. The remaining AU Series A convertible preferred shares not taken up by SWP were redeemed by AU under the plan of arrangement.
SWP entered into a new credit agreement and completed one private placement and three public offerings to finance the AU acquisition. On May 28, 2007, SWP entered into a credit agreement with The Toronto-Dominion Bank (TD) and GE Canada Finance Holding Company (GE), pursuant to which TD and GE established a non-revolving term facility in favour of SWP in a principal amount of up to $750 million.
On February 15, 2007, SWP closed the $225 million subscription receipt offerings, comprising a public market bought deal and a private placement. Under the private placement, 15,753,086 subscription receipts were issued to various funds and accounts, over which Third Avenue Management LLC has exclusive investment authority for aggregate gross proceeds to SWP of $125,047,997. Under the public offering, 12,350,000 subscription receipts of SWP were issued and sold for gross proceeds to SWP of $100,035,000. Genuity Capital Markets and TD Securities Inc. acted as the underwriters in connection with the public offering and agents in respect of the private placement. The underwriters were granted an option to purchase up to an additional 1,852,000 subscription receipts at the public offering price of $8.10 per subscription receipt, which they exercised on February 28, 2007, bringing aggregate proceeds of the public offering to $115,040,250.
On April 19, 2007, SWP closed the $275,400,000 public offering of Class 2 subscription receipts and Genuity Capital Markets, TD Securities Inc. and National Bank Financial Inc., who together acted as underwriters in connection with the offering, exercised their over-allotment option in full to purchase an additional 5,100,000 Class 2 subscription receipts at the offering price of $8.10 per subscription receipt, bringing aggregate proceeds of the offering to $316,710,000.
On May 3, 2007, SWP closed the $315,900,000 public offering of Class 3 subscription receipts and Genuity Capital Markets, TD Securities Inc. and National Bank Financial Inc., who together acted as underwriters in connection with the offering, exercised their over-allotment option in full to purchase an additional 5,850,000 Class 3 subscription receipts at the offering price of $8.10 per subscription receipt, bringing aggregate proceeds of the offering to $363,285,000.
On May 29, 2007, all of the outstanding subscription receipts issued in connection with a private placement that closed on February 15, 2007 and the public offerings that closed on February 15, 2007, April 19, 2007 and May 3, 2007 were exchanged into common shares of SWP upon the initial take-up by SWP of the common shares of AU. Each subscription receipt holder received one common share of SWP for each subscription receipt. A total of 113,905,586 common shares of SWP were issued in connection with this exchange and began trading on the Toronto Stock Exchange on May 29, 2007.
The total value of the acquisition, including cash and assumed debt, is approximately $1.8 billion.
Saskatchewan Wheat Pool, headquartered in Regina, is a major Canadian agribusiness that supplies grain and other agricultural products to markets across North America and globally.
AU, headquartered in Winnipeg, is a leading diversified agribusiness with crop inputs and services, grain merchandising, livestock production services and financial services across western Canada, the United States and Japan.
JRI, headquartered in Winnipeg, is the largest privately owned Canadian agri-business. Its operations include the handling and merchandising of Canadian produced grains and oilseeds to domestic and international markets, the sale of crop input products and services and canola processing. JRI is a wholly owned subsidiary of James Richardson & Sons, Limited (JRSL) which is a privately owned Canadian investment and holding corporation owned and controlled by the Richardson family.
Cargill Limited, headquartered in Winnipeg, employs more than 10,000 people across the country and has business interests in meat, egg and oilseed processing, power and gas marketing, animal nutrition, salt, chocolate, crop inputs, as well as grain handling and merchandising.
Torys LLP represented Saskatchewan Wheat Pool, working with general counsel Ray Dean. Torys' team was led by James Scarlett and included Tony DeMarinis, Patrice Walch-Watson, Adam Armstrong, John Emanoilidis, Tom Yeo, Adam Levy, Jackie Taitz, Victoria Blond and Jim Miller (Canadian corporate/securities); Tom Zverina, Jonathan Weisz, Nadine Rockman, Darien Leung and Theresa Gregoire (lending); Jay Holsten, Sue-Anne Fox, David Wawro, Jay Romagnoli and Craig Pell (competition); Sabrina Gherbaz, Joanna Dybel, Danielle Townley and Ken Fone (real estate); Christina Medland and Stacey Parker-Yull (pensions and employment); Andy Beck and Mike Arnot (US securities); John Cameron and Bill Estey (research); Corrado Cardarelli and Grace Pereira (tax); Jim Tory (litigation); Blair Keefe (financial institutions); and Dennis Mahony and Michael Fortier (environmental).
Doug Ballou of MacPherson Leslie & Tyerman LLP acted as corporate counsel to Saskatchewan Wheat Pool.
Davies Ward Phillips & Vineberg LLP represented Agricore United, working with general counsel Chris Martin. The Davies team included Bill Gula, Vincent Mercier, Peter Hong, Philippe Rousseau, Robert Druzeta and James Wilson (corporate/securities); Stephen Ruby and Elie Roth (tax); John Bodrug and Christopher Margison (competition); Gerald Shepherd (US securities); Nicholas Leblovic (lending); Davit Atkman (litigation); and Alex Pike (environmental).
Osler, Hoskin & Harcourt LLP represented James Richardson International Limited and James Richardson & Sons, Limited on matters relating to JRI's proposed acquisition of AU, working in particular with Michael Guttormson, general counsel to JRSL. The Osler team was led by Linda Robinson and included Doug Bryce, Don Gilchrist and Kashif Zaman (corporate); Paul Crampton and Janet Bolton (competition); and Firoz Ahmed and Julie Colden (tax).
Fillmore Riley LLP represented James Richardson International Limited in matters relating to JRI's purchase of certain AU grain facilities and agri-products retail operations, working with JRI's general counsel, Jean-Marc Ruest. Fillmore Riley's team was led by Jody Langhan, and included Derek Cumming, James Carlson, Cy Fien, Daniel St-Jean, Kelly Beattie, Wes Burrows, Shauna Braz, Craig White, Johanna Charles and Roberta Pettit.
Cargill Limited was represented by an in-house legal team, including Philip Pauls and Cameron Funk.
Blake, Cassels & Graydon LLP represented GE Canada Finance Holding Company on the credit facility with a team that included Michael Harquail, Michelle Laniel, Iris Tam and Lauren Temple.
McCarthy Tétrault LLP represented The Toronto Dominion Bank in connection with the credit facility with a team that included Gordon Baird, Barry Ryan, Edward Ra, Ana Badour and Jason McMurtrie (financial services) and Tzen-Yi Goh, David Starkman and Alexis Wiseman (real property).
Fasken Martineau DuMoulin LLP represented Genuity Capital Markets in its capacity as financial advisor to Saskatchewan Wheat Pool in respect of the takeover bid, with a team led by Jonathan Levin and including Richard Steinberg and Daniel Batista. Fasken Martineau also represented (a) Genuity Capital Markets and TD Securities Inc., as underwriters in respect of the public offering and agents in respect of the private placement that closed on February 15, 2007, with a team led by Jonathan Levin and including Richard Steinberg, Daniel Batista and Michael Gleeson (securities) and Mitchell Thaw (tax) and (b) Genuity Capital Markets, TD Securities Inc. and National Bank Financial Inc., as underwriters in respect of the public offerings that closed on April 19, 2007 and March 3, 2007, with a team led by Jonathan Levin and including Richard Steinberg, Daniel Batista (securities) and Mitchell Thaw (tax).