UPDATE 1-Australia's Ruralco backs $337 mln bid from Canada's Nutrien

(Reuters) – Australian rural services firm Ruralco Holdings Ltd said on Wednesday it has received a A$469 million ($337 million)takeover offer from Canadian fertilizer maker Nutrien Ltd and will recommend the bid to its shareholders.

Nutrien, which owns the Landmark agricultural business in Australia, offered A$4.40 a share in cash for Ruralco, representing a premium of about 44 percent to the company’s last close.

The deal is likely to face antitrust concerns as it merges two sector heavyweights, forming a company which would be among the largest rural services providers in the country.

Ruralco said in a statement its board unanimously recommended the transaction in the absence of a superior proposal.

Australia’s competition regulator earlier in the day said it was aware of media speculation concerning the possible acquisition and is “currently monitoring” the situation.

The offer comes at a time of heightened global interest in Australia’s agriculture sector, with Saputo Inc grabbing Murray Golburn for $1.0 billion, while GrainCorp Ltd received a A$2.38 billion bid from a privately held asset manager.

Ruralco declared an interim dividend of up to 10 cents per share, and an additional special dividend of 90 cents a share on or before implementation of the deal.

Ruralco has been grappling with a drop in crop protection product sales as a severe drought grips Australia’s east cost, while a regulatory crackdown has hit its live export division.

Nutrien, formed by the merger of Agrium Inc and Potash Corp of Saskatchewan in January last year, said on Tuesday it was in talks with Ruralco but no agreement had been reached.

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Nutrien could not be immediately reached for a comment.

Reporting by Niyati Shetty in Bengaluru; editing by Richard Pullin



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