Fertilizer maker and input retailer Agrium has again extended its offer to buy UAP, a major North American input retailer, while it waits for green lights from antitrust regulators in both Canada and the U.S.
Calgary-based Agrium announced Friday that its US$39-per-share tender offer, which had previously been extended by nine days to midnight ET on Jan. 17, is now extended to midnight ET, Feb. 25.
Here in Canada, the company is waiting on an advance ruling certificate or “no-action” letter from federal regulators, for which it filed on Dec. 14 as per the federal Competition Act.
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In the U.S., meanwhile, the company needs federal regulators to either terminate a required waiting period under that country’s Antitrust Improvements Act (also known as the Hart-Scott-Rodino or HSR Act), or let the waiting period expire.
Agrium, which had hoped to complete the deal in its first fiscal quarter this year, has made moves it hopes will lead to approval from the U.S. Federal Trade Commission (FTC) sooner rather than later.
Agrium on Jan. 14 announced it had withdrawn the notification and report form that it’s required to file under the HSR Act, and planned to refile it in the next 30 days with additional information. Agrium had heard in “informal discussions” with FTC staff that the commission would need more information about the two companies’ businesses.
“Second request”
By doing so, the company said Monday, it hoped to avoid an official “second request” for additional information from the FTC, which could push the closing of a deal well into this summer. And even if it does file more information, Agrium said, there’s still no assurance the FTC won’t make that second request.
Agrium and UAP have only until Sept. 2 to complete a deal without having to go back to their respective boards of directors to approve a new offer. That said, Agrium “remains confident of a successful close to the transaction” as the FTC review continues.
However, the company noted in a release that as of Jan. 17, about 35.8 million shares of UAP stock had been tendered to Agrium’s offer and not withdrawn. That’s less than 70 per cent of the UAP common shares outstanding as of August 2007 — and down from the 44.4 million shares (85 per cent) that had been tendered to Agrium’s offer as of Jan. 8 this year.
UAP shares were trading Friday afternoon at around US$38.15, down from a 52-week high of US$39.23 on Jan. 9.
UAP runs about 370 distribution and storage facilities and three formulation plants, selling chemicals, fertilizer and seed to farmers, commercial growers and regional-level dealers across North America.
The company’s Canadian wing, based at Dorchester, Ont., includes warehouses in B.C., Quebec and Ontario and product lines of herbicides, fungicides, insecticides, nutrients, adjuvants, inoculants, growth regulators and other specialty products.
The deal would make UAP an Agrium subsidiary and create the largest North American retailer of crop inputs and services, with broader coverage as the two companies combine their “complementary footprints,” as they explained when the deal was announced last month.
