The Australian parent of Winnipeg feed manufacturer Ridley Inc. has sold its controlling stake in the feed company to a Toronto financial services firm.
Fairfax Financial Holdings said in a release that has
bought 9.53 million shares of Ridley Inc., for an aggregate price of about CAN
$81 million, to Ridley’s Australian parent company, Ridley Co. Ltd.
The deal, which
gives Fairfax a 69% controlling interest in Ridley Inc., is expected to be
sealed by Oct. 20, Ridley said in a separate release last week. Fairfax did not
previously own any Ridley shares.
The deal between Ridley Australia and
Fairfax is a private sale, Ridley Inc. said in its release, and “no offer will
be made to Ridley shareholders generally.”
Fairfax noted in its release
that “the shares are being purchased for investment purposes and Fairfax may
acquire additional shares from time to time in accordance with applicable laws.”
Under the terms of the deal, Ridley Inc. will separate its joint credit
facility and insurance policies from the Australian firm, and will also continue
to operate under the name Ridley Inc.
Ridley Inc., whose brands include
FeedRite, Ridley, Hubbard Feeds and Sweetlix, maintains head office operations
both in Winnipeg and in Mankato, Minnesota., southwest of Minneapolis.
Australia announced in May that it wanted to put its stake in the Canadian
company up for sale.”We are more resolutely focused than ever on improving
shareholder returns and will continue to implement our strategy to achieve
this,” said John Keniry, Ridley’s chairman.
Operating results this year
were in line with expectations at AUS $26.8 million compared to last year’s AUS
$25.7 million. However, after one-off items of AUS $16.3 million, the profit was
reduced to AUS $10.5 million compared to last year’s AUS $22.7 million.
Significant items included costs associated with the Canadian legal
settlement, the corporate and operational restructure following the strategic
review and closure of plants in Australia and Canada, and the defence of
Graincorp’s hostile takeover bid. Ridley Agriproducts’ earnings declined by 18%
as a result of reduced demand, primarily in the beef and sheep sectors, and
losses in the northern mills operations and supplements business.
Ridley Inc in North
America increased earnings by 54% in US dollar terms and 34% in Australian