Sydney - Arabstoday
Glencore International Plc, the world’s largest listed commodities trader, has expressed an interest in Canada’s biggest grain handler Viterra Inc., according to a person familiar with the situation. Other companies may also be studying Viterra, said the person, who declined to be identified because the details haven’t been made public. Closely held grain distributor Cargill Inc. has expressed an interest, the Wall Street Journal reported, citing people it didn’t identify. Viterra has gained 24 per cent since saying last week it had received approaches, giving it a market value of C$5 billion ($5 billion). Glencore Chief Executive Officer Ivan Glasenberg is looking to expand his North American grain business even as he pursues a 27.7 billion-pound ($43.4 billion) takeover of Swiss metals and coal producer Xstrata Plc. US agricultural trading companies Bunge Ltd. and Archer Daniels Midland Co. may make approaches for Viterra, according to Aston Hill Financial Inc. “A bidding war for Viterra could emerge and a large price will need to be paid,” Belinda Moore, a Brisbane-based analyst with RBS Morgans Ltd., said today in a report. Holly Gibney, a spokeswoman for Regina, Saskatchewan-based Viterra, declined to comment and referred back to the company’s March 9 statement in which it said it had received expressions of interest. A spokesman for Baar, Switzerland-based Glencore declined to comment. Lisa Clemens, a spokeswoman for Cargill, declined to comment. Glencore’s interest in Viterra was reported earlier by the Sunday Telegraph. Buying Viterra would give Glencore the largest share of the Canadian grain-handling market just as the Canadian Wheat Board’s monopoly over wheat and barley grown in the west of the country comes to an end. Viterra’s share of Canadian grain-handling may rise to almost 50 percent in the next few years from 45 percent, its Chief Executive Officer Mayo Schmidt said in an interview on March 8. The Canadian government passed a law in December that will end the monopoly and give farmers the choice to sell to other buyers as of Aug. 1. Viterra said in January it expects to increase grain volumes and earnings after the board’s control of supplies ends. Glencore is also among companies interested in closely held grain handler Gavilon Group LLC, people familiar with the matter said March 6. “Investors would be pleased to see they’re not missing opportunities despite the larger merger,” London-based Fairfax IS analyst John Meyer said yesterday in a telephone interview. “If Xstrata doesn’t happen, they’re getting on with growing the business anyway.” Viterra’s Sydney-traded shares jumped 32 percent to A$13.60 at 1:39 p.m. local time. Its Toronto-traded shares closed up 24 percent at C$13.58 on March 9 following the statement about expressions of interest. Glencore’s Hong Kong-traded shares gained 2.1 percent to HK$50.90 at 10:40 a.m. local time. Canadian agricultural supplier Agrium Inc. could bid, John Hughes, an analyst at Desjardins Securities Inc. in Toronto, said last week in an interview. Cargill as well as Bunge and Archer Daniels Midland may be interested, said Andrew L.B. Hamlin, a money manager at Aston Hill Financial in Toronto, which oversees about C$5.5 billion, including Viterra shares.