Sask Wheat Pool Bid For Agricore United 'Bad News' For Farmers

Sask Wheat Pool Bid For Agricore United 'Bad News' For Farmers

Wow. I missed this yesterday.

If I was a Agricore share holder or a Sask.Pool shareholder (Wait a minute. I am on both counts) I would welcome the news. It could mean:

1. An instant rise in share price
2. The merger could create a healthy company

I've got lots of opinions on this news.

Why it should happen:

• Lets face it both companies are having trouble. AU had a 2% net margin this past year after years of losses. Not good. And SWP is still not in the black
• The farm supply and grain trade are going to contract ( get smaller) Margins are shrinking and companies are starting to outnumber farmers
• With CWB on the road out, big changes are going to happen with the grain trade in Canada. This large a company (market share) could have advantages
• It will make share holders money. (maybe)
• Like the article says somebody is going to go after SWP anyway.

Why the takeover will not happen:

• The post is right. Merger may not be good for farmers. ( Large multi-nationals controlling the grain trade in Canada, may not be good either. OH sorry! My practical side is showing)
• The post is right. ADM will have something to say in this. They are booming right now and are well positioned to prosper in the new Bio-fuel future. (if it plays out) I'm guessing a strong presence in Canada would benefit them.
• The Feds may step in to stop it. The post is right, 55% of the trade is serious (They want market forces to control wheat trade by getting rid of the Wheat Board. Darn I wasn't going to say any thing about the Wheat Board. Just ignore that)
• Share holders on both sides may not go along.
• SWP may get merged some other way.