P+H to make play for Great Lakes grain handler

P+H to make play for Great Lakes grain handler

Prairie grain firm Parrish and Heimbecker plans to expand its presence in southern Ontario through a full takeover of a grain handler and mustard miller.

The Winnipeg company on Tuesday said it has mounted an all-cash $115-per-share bid for the 72 per cent of Goderich, Ont.-based Thirdcoast Ltd. it doesn’t already own.

Given Thirdcoast’s common shares outstanding as of March 31, 2011, P+H’s offer would be worth about $26.4 million, including a stake of about 16.6 per cent P+H has already locked into its bid.

Thirdcoast operates grain handling, processing and storage facilities at Goderich, Hamilton and Port Colborne, Ont. and also mills Prairie-grown mustard seed at Hamilton.

P+H emphasized in a release Tuesday that its offer isn’t subject to any financing conditions and will be funded through cash on hand and “previously committed” financing.

It also noted its bid, which upon launch is expected to remain open for at least 35 days, is at a premium of about 53 per cent over the Jan. 31 bid price for Thirdcoast’s common shares.

P+H noted its own stake of just under 28 per cent in Thirdcoast makes it an “insider” in the company. Thus an independent valuation of Thirdcoast’s common shares must be done before P+H’s bid circular can be sent to other Thirdcoast shareholders.

P+H said Tuesday it has already asked for an independent committee of the Thirdcoast board of directors to hire a valuator for the job. At least one member of the Heimbecker family already sits on all three of Thirdcoast’s existing board committees.

“Negative effect”

Thirdcoast, in its last fiscal year ending March 31, 2011, booked after-tax profit of $3.9 million on $26.7 million in revenues, down from $4.1 million on $28.1 million in the previous year.

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