Agrium-Potash merger set for shareholder approval -source
By John Tilak and Rod Nickel
TORONTO/WINNIPEG (Reuters) - Shareholders of Agrium Inc AGU.TO and Potash Corp of Saskatchewan Inc (POT.TO: Quote) are set to overwhelmingly approve a merger of the two Canadian fertilizer producers, according to a source familiar with the situation, despite initial skepticism from Agrium investors.
About 99 percent of the votes from both groups of shareholders are in favor of the transaction, said the source, who spoke on condition of anonymity as the matter is not public. About half of the votes have come in, the source said.
Potash shares dipped slightly in New York and Toronto on Thursday, while Agrium stock edged higher.
The merger requires two-thirds support of votes cast by shareholders of each company.
Last month, Potash and Agrium agreed to join forces in an all-stock deal that will allow Potash shareholders to own 52 percent of the new company, with the rest going to Agrium shareholders. Fertilizer profits have slumped as prices fall due to excessive supplies and weak crop prices.
Some Agrium investors said at the time they were uneasy about the deal because it would give them greater exposure to the slumping crop nutrient potash. Agrium shares fell when the deal was announced.
Capital Innovations LLC will vote its shares in both companies for the merger because it provides scale and diversification to weather a slumping market, said Michael Underhill, Capital's chief investment officer.
"It's accretive (and) they look like attractive companies together. That combination affords a better platform." Continued...