Glencore among suitors for Canada's Viterra: source

Mon Mar 12, 2012 12:27pm EDT
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By Martin de Sa'Pinto and Rod Nickel

ZURICH/WINNIPEG, Manitoba (Reuters) - Glencore (GLEN.L: Quote) is one of a handful of parties eyeing a potential bid for Viterra VT.TO, Canada's largest grain handler, as the diversified trading house looks to boost its agricultural presence, a Swiss-based industry source said on Monday.

Viterra, with a current market value of around $5 billion, said on Friday it had received expressions of interest from unnamed third parties for a possible takeover, sending its shares up more than 20 percent.

Shares of the Regina, Saskatchewan-based company gained a further 4 percent Monday morning in Toronto, taking the stock to a 3-1/2 year high, before paring gains.

Taking control of Viterra would give Swiss-based Glencore access to Canada's prized canola, spring wheat, oats and durum wheat supplies. The country, the world's leading exporter of each crop, is due to end a grain marketing monopoly in August that could give a big lift to Viterra's business.

But a non-Canadian bid for Viterra, which also owns almost all the grain terminal space at ports in South Australia, could face regulatory hurdles in Ottawa, with its reputation for resource nationalism. That could discourage prospective suitors.

Glencore, which is also pursuing a 23 billion pound ($36 billion) takeover of miner Xstrata XTA.L, already markets and produces crops alongside metals, minerals and oil.

The trading house - the world's largest diversified commodities trader - has long said it planned to expand in agricultural commodities.

It held unsuccessful talks last year with Louis Dreyfus, a leading player in the farm sector. It was also named earlier this month as one of several suitors circling Gavilon Group, a U.S. energy and grains trader.   Continued...

Swiss commodities trader Glencore's logo is seen in front of its headquarters in Baar, near Zurich, February 6, 2012. REUTERS/Romina Amato