1 / 8

United Grain Growers Limited The ADM Alternative Presented by: Kelsey Kitsch, Hilary Thompson Kianoush Khaleghpour Lesli

United Grain Growers Limited The ADM Alternative Presented by: Kelsey Kitsch, Hilary Thompson Kianoush Khaleghpour Leslie Mitchner Marcel Guay Manoj Mehta. ADM. One of the world’s leading international agribusiness companies with a global network of subsidiaries & affiliates

rudolf
Download Presentation

United Grain Growers Limited The ADM Alternative Presented by: Kelsey Kitsch, Hilary Thompson Kianoush Khaleghpour Lesli

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. United Grain Growers LimitedThe ADM AlternativePresented by:Kelsey Kitsch,Hilary ThompsonKianoush KhaleghpourLeslie MitchnerMarcel GuayManoj Mehta

  2. ADM • One of the world’s leading international agribusiness companies with a global network of subsidiaries & affiliates • Operating in 43 countries on 4 continents • Operations: procure & process grain, oilseed, and other agricultural products. • Significant presence in Canada • 80% of Canada’s flour milling capacity • Total assets > $10 billion • Net sales > $13 billion

  3. Purpose • Cooperative joint venture with farmers only. • Do not want a hostile environment and will only proceed with alliance after shareholder approval. • Do not seek control of UGG (ownership < 50%) • Especially considering Canada’s regulatory environment.

  4. Current Ownership of UGG • Oppenheimer & Company 13% • US Risk Arbitrageurs 6% • Canadian Institutions 20% • Retail Investors 43% • UGG Employees 3% • Alta-Man 15% Total: 100%

  5. Benefits to UGG • Additional market for UGG’s grain through a more secure link to ADM processing plants. • Gain increased market presence through ADM and its international partners. • Access to a world-leading agri-business company with broad range of merchandising, milling, processing and product research expertise. • ADM will make significant Equity investment in UGG. • Reduce UGG’s leverage close to its target of 35% debt : capital. • Provide financial flexibility moving forward, given UGG’s significant capital expenditure plans. • Accelerate UGG’s plan for modernization of its grain network. • Reduction of Administrative Cost.

  6. Benefits to ADM • UGG is an attractive partner. It has efficient grain handling facilities and distribution network in Canada. • We hope to strengthen our relationship with UGG customers, who are among the most innovative farmers in Western Canada. • Diversification of crop base. • Reduction of Administrative Cost.

  7. Mechanics of Offer • Step 1: ADM purchases $35 million of convertible debentures. With the approval of the shareholders these are converted to 2.2 million new shares at $16/share • If rejected by shareholders, ADM will withdraw from the venture. • Step 2: ADM purchases additional 4.8 million new shares at $16/share • Total shares now held by ADM- 7 million (45% ownership) • Step 3: Formal offer from UGG to its shareholders to buy back 3.9 million shares at $16/share • ADM will not tender to this issuer bid

  8. Offer Details • Offer Price/share: $16 • Net increase in number of shares: 3.2 million • Total outstanding shares (post-offer): 15.7 million • Net capital infusion: $50 million • ADM equity ownership in UGG: 45% (UGG retains control) • Current DCF value: $9.26/share • Alta- Man Offer: $13.75/share • Current market value: $14.45/share

More Related