Swiss mull Viterra bid

Saskatchewan Premier Brad Wall says Viterra Inc. does not fit the province’s definition of a strategic resource, but that the fiscal and economic impacts of a potential takeover of the grain handler must be analyzed.

CALGARY — Saskatchewan Premier Brad Wall says Viterra Inc. does not fit the province’s definition of a strategic resource, but that the fiscal and economic impacts of a potential takeover of the grain handler must be analyzed.

The comments made in Regina came as several foreign bidders were reportedly lining up to make takeover offers for the company.

The premier said Ottawa will need to determine if the Viterra takeover is a net benefit to Canada and Saskatchewan, but noted that it’s different from PotashCorp because it doesn’t involve a strategic resource.

“The strategic resource was part of our potash analysis, but only one of three parts,” Wall told reporters in Regina.

“Our position is simply this: If there is to be a takeover, we would undertake the same very deliberative, very thorough analysis of the takeover, and the measure we would use before coming to any conclusion, before making a recommendation to the federal government, is ’is this a net benefit to Canada and to the people of Saskatchewan?”’

Viterra, he said, “doesn’t fit our own definition of a strategic resource that we would offer up to the feds.”

Viterra confirmed last week that it had received “expressions of interest from third-parties.”

Britain’s Sunday Telegraph, which cited unidentified sources, reported Switzerland’s Glencore PLC was contemplating a $5.5-billion offer. Glencore declined to provide any comment to The Canadian Press on Monday.

Meanwhile, the Wall Street Journal reported that U.S. agribusiness Cargill Inc. was also one of the groups interested in buying Viterra, also citing unidentified sources familiar with the matter.

The potential bids come as the company is poised to benefit from the end of the Canadian Wheat Board’s monopoly on the marketing of wheat and barley in Western Canada.

The Saskatchewan premier helped lead the opposition to a takeover attempt by BHP Billiton for PotashCorp., and said the province would undertake a similarly thorough review on a possible Viterra bid before making a recommendation to Ottawa.

Ottawa eventually blocked that deal under provisions of the Investment Canada Act.

The opposition critic for the Canadian Wheat board said Monday that Prairie farmers would suffer if Canadian grain handling giant Viterra Inc. were to fall into foreign hands.

“I’m concerned that the independent Prairie farmer will turn into more of a serf to international agrifood giants, and that we will no longer be price setters of our commodities, we will be price-takers as dictated by someone else,” NDP MP Pat Martin said in an interview from Ottawa.

Martin and others had predicted it was only a matter of time before big international players looked to snatch market share that the Wheat Board used to dominate.

“This market share was delivered on a silver platter to these international agrifood giants,” said Martin, referring to the Conservative government’s move to abolish the Wheat Board’s monopoly late last year.

Viterra’s shares surged nearly 25 per cent on Friday after the news was announced. Monday afternoon, its shares were up another 6.4 per cent, or 87 cents, to $14.45 on the Toronto Stock Exchange.

Viterra, formed by the merger of the Saskatchewan Wheat Pool and Agricore United, is a grain handler, marketer and food processor with operations across Canada, the United States, Australia, New Zealand and China.

Alberta Investment Management Corp. is the company’s largest shareholder with a roughly 16 per cent stake or about 60 million shares. AIMCO declined to comment on Monday.

Glencore extracts, ships and refines raw materials from coal to corn. It is based in the Swiss town of Baar but has its main listing in London.

Last month, Glencore agreed to a merger deal with Anglo-Swiss mining group Xstrata PLC in a move that will create the world’s fourth largest natural resources group.

The combined company, to be called Glencore Xstrata with a combined market value of $90 billion, will control a chain of businesses from mining to refining, storage and shipping of basic commodities like coal, copper and corn.

Its properties would also include major nickel mining and refining businesses in Canada, where Xstrata subsidiary Xstrata Nickel owns the former Falconbridge nickel company in Sudbury, Ont.

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