S&P keeps Saskatchewan Wheat Pool on positive watch

Standard & Poor's said it maintained the CreditWatch placements on Saskatchewan Wheat Pool (B+/Watch positive) and Agricore United (BB/Watch developing).

The ratings on both companies were put on CreditWatch Nov. 8, the agency noted, adding that this action follows the recommendation by Agricore's board of directors, upon the recommendation of a Special Committee, to reject Saskatchewan Wheat Pool's revised hostile bid for the following reasons: The bid significantly undervalues Agricore, it is primarily noncash in nature, there is an uncertain synergy estimate and there is the potential for superior proposals that could result from an ongoing strategic alternatives process currently under way at Agricore.

According to S&P, the proposed combination of the companies would be positive in terms of market share, synergies and pricing power, with the combined entity to have revenues of about C$4.6 billion and lease-adjusted EBITDA of about C$230 million on a trailing 12-month basis, based on each company's October 2006 quarter-end.

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