Sun Gro shares up sharply on takeover news
Jan. 17, 2011, Vancouver – Shares of Sun Gro Horticulture Inc. (TSX:GRO)
were up more than 25 per cent Monday after IKO Enterprises Ltd.
announced a deal to buy the peat moss producer in a deal that values the
company at about $147 million.
Jan. 17, 2011, Vancouver – Shares of Sun Gro Horticulture Inc. (TSX:GRO) were up more than 25 per cent Monday after IKO Enterprises Ltd . announced a deal to buy the peat moss producer in a deal that values the company at about $147 million.
Calgary-based IKO announced late Sunday that it would pay $6.60 in cash for the company, formerly known as Sun Gro Horticulture Income Fund.
“We are satisfied that the transaction with IKO results in the best value available to our shareholders,’’ Sun Gro president and chief executive Mitch Weaver said in a statement.
Sun Gro shares were up $1.41 at $6.53 on the Toronto Stock Exchange. IKO, a privately held maker of asphalt roofing, already holds a nearly 20 per cent stake in Sun Gro.
“We are very pleased to be increasing our ownership interest in Sun Gro and look forward to building on this outstanding company’s more than 80 years of leadership and innovation in the growing-media industry,’’ company spokesman Derek Fee said.
The sale is expected to close in March and requires that at least two-thirds of Sun Gro shareholders accept the offer. The proposed deal follows a review of strategic alternatives by the company announced in September. The company converted from a trust to a corporate structure at the end of last year as changes to tax rules governing income trusts to tax them more like corporations came into force.
Sun Gro is a producer and distributor of peat and bark-based growing mixes with 12 Canadian plants and 13 plants in the United States.