Feed manufacturer Ridley Inc. says it’s reviewing options now that its Australian parent aims to sell its majority stake.
Ridley Corp., the Sydney, Australia feed and salt company that owns a 69 per cent controlling interest in TSX-traded Ridley Inc., has told the firm’s board that it wants to sell, “subject to receiving satisfactory offers,” the Canadian firm said Tuesday.
Ridley Inc., whose board is now chaired by former Agricore United CEO Brian Hayward, said Tuesday it has launched a “strategic review” to explore “potential sale alternatives” for Ridley Corp. as well as for its other shareholders.
To that end, the company said it has started contacting “potentially interested parties,” some of whom have already signed confidentiality agreements under which they can review information about Ridley and its financial affairs.
Other than those confidentiality agreements, however, Ridley stressed that it hasn’t made any agreements with any interested parties, nor has it received any proposals or offers to buy. The strategic review is just at its “initial stage,” Ridley wrote.
Sale not assured
All that said, Ridley also warned investors in a press release that “there can be no assurance that any transaction will be pursued, announced, entered into, or consummated by the company” relating to this review.
CIBC World Markets and Davies Ward Phillips and Vineberg will act as Ridley Inc.’s financial and legal advisors respectively during this review process, the company said.
Ridley Inc., which keeps dual headquarters in Winnipeg and at Mankato, Minn., owns the Ridley, FeedRite, Sweetlix and Hubbard Feeds brands and has product lines in feed, premixes, meal, pellets and blocks.
The company recently halted years of uncertainty over its financial future when it agreed to pay $6 million to end its exposure to class-action lawsuits over the arrival of BSE in Canada.
Cattle producers in four provinces had filed co-ordinated suits, only one of which was granted class-action status before the settlement was announced in February. The suits had alleged negligence on Ridley’s part leading to the infection of an Alberta cow with BSE, to be discovered in May 2003.
The federal government remains a defendant in those suits, which claim potentially several hundreds of millions of dollars in damages relating to cattle producers’ losses from the BSE-related closure of the U.S. border to Canadian beef and cattle.
It’s not yet known how the settlement cash will be paid out or to whom. Ridley has stressed that its settlement “makes no admission of liability or wrongdoing.”
Ridley then announced further expansion into the U.S. market the following month by buying Ultralyx, a livestock supplement block maker in Kentucky, for US$3 million.