WINNIPEG (Reuters) – Canada’s Agrium Inc will woo reluctant shareholders next week in Toronto to support its proposed merger with Potash Corp of Saskatchewan Inc, and seek to appease concerns that it has little to gain by marrying its fertilizer rival.
The $26-billion, all-stock merger would combine Potash’s crop nutrient production capacity, the world’s largest, with Agrium’s farm retail network, North America’s biggest.
It represents a major shift for Agrium Chief Executive Chuck Magro, who at its annual meeting in May sounded neutral at best on potash, said John Goldsmith, vice-president of Montrusco Bolton Investments, a top 20 Agrium investor. “Something must have happened to make him bet the farm on the potash commodity,” Goldsmith said, adding that he is concerned the new company would be too linked to the slumping commodity. On Monday, Magro said potash will be “a terrific business longer term.”
Montrusco would need a compelling new rationale from Agrium for it to vote for the deal, Goldsmith said.
Shareholders, including Montrusco, plan to meet with Agrium on Tuesday in Toronto. Agrium shareholders generally dislike the deal, while Potash investors are pleased, Scotiabank analyst Ben Isaacson said in a note on Tuesday.
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