Agrium (AGU) to Sell Minority Interest in Medicine Hat Facility for $915M; Approves $900N 'Dutch Auction' Buyback
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Price: $89.55 -0.54%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.2%
EPS Growth %: -28.8%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.2%
EPS Growth %: -28.8%
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Agrium Inc. (NYSE: AGU) has reached an agreement for Glencore International plc ("Glencore") to sell Viterra's minority position in a nitrogen facility located in Medicine Hat, Alberta to CF Industries Holdings, Inc. ("CF Industries") for $915-million. The resulting net purchase price for the portion related to the retail business is estimated to be about $175-million plus approximately $400-million in retail working capital. This purchase price is net of operating cash flow generated by the Agri-Products business from March 31, 2012 until close of the transaction, which is expected in the fourth quarter of 2012.
In 2011, Viterra's total Agri-Products business generated $2.4-billion in revenue and $244-million in EBITDA according to Viterra's annual report. We estimate that approximately $100-million of EBITDA represents the retail portion of the 2011 earnings, excluding any synergies to be obtained by Agrium in the future.
Agrium also announced today that the Board of Directors has authorized the making of a Dutch auction substantial issuer bid (the "Bid") to repurchase $900-million of its outstanding common shares. Agrium anticipates that the Bid will commence in early September 2012 and be scheduled to be completed in mid-October 2012. The maximum and minimum price that shareholders may select under the Bid will be determined in the context of the market price of Agrium common shares at the time of commencement of the Bid. Shares purchased under the Bid will be cancelled.
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In 2011, Viterra's total Agri-Products business generated $2.4-billion in revenue and $244-million in EBITDA according to Viterra's annual report. We estimate that approximately $100-million of EBITDA represents the retail portion of the 2011 earnings, excluding any synergies to be obtained by Agrium in the future.
Agrium also announced today that the Board of Directors has authorized the making of a Dutch auction substantial issuer bid (the "Bid") to repurchase $900-million of its outstanding common shares. Agrium anticipates that the Bid will commence in early September 2012 and be scheduled to be completed in mid-October 2012. The maximum and minimum price that shareholders may select under the Bid will be determined in the context of the market price of Agrium common shares at the time of commencement of the Bid. Shares purchased under the Bid will be cancelled.
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