Glencore seen in hunt for grain handler Viterra

Tue Mar 13, 2012 12:23am 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 takeover bid for Viterra VT.TO, Canada's largest grain handler, a Swiss-based industry source said on Monday, and Ottawa signaled it was keeping an open mind on any possible deal.

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 6 percent on Monday in Toronto, reaching their peak after Canada's industry minister suggested he was open to a possible foreign takeover.

"Unlike the opposition, our government understands the importance of attracting foreign investments to our economy," Industry Minister Christian Paradis said in the House of Commons. "Foreign investments help Canadian companies to grow and innovate and provide new opportunities to connect our firms to the world. Our government will continue to welcome investment that benefits Canada."

Paradis was responding to a question from an opposition legislator who asked if the government would intervene if it can't clearly prove a takeover of Viterra was in Canadians' best interests.

Agriculture Minister Gerry Ritz was more guarded about Viterra, when asked about the government's stance by the House of Commons' agriculture committee, saying: "I will not speculate on any takeover at this point."

Taking control of Viterra would give Swiss-based Glencore access to Canada's prized canola, spring wheat, oats and durum wheat supplies. Canada, 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.

"It's a very attractive asset, but it's also very large - so there aren't a lot of players who can write big checks," said Greg Pearlman, head of BMO Capital Markets food and consumer group, at the Reuters Global Food and Agriculture Summit in Chicago. "It's hard to handicap right now."   Continued...

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