By Brooks Johnson, The Minnesota Star Tribune
The board of a western Minnesota cooperative said “CHS is the right fit for us” after weighing a competing offer from North Dakota-based Arthur Cos., but members will still have the final say next week.
CHS initially announced a $200 million deal to acquire West Central Ag Services in May. Arthur publicized its own $250 million bid for the coop this month, causing West Central to delay a vote on the CHS deal.
Inver Grove Heights-based CHS has since increased its offer to $225 million.
West Central’s board met with Arthur and CHS management last week and concluded the CHS deal is a “superior proposal” that better met “patron growers’ long-term supply and market objectives,” according to a news release Monday.
West Central Ag Services members will vote on the board-backed CHS acquisition Nov. 26.
“CHS offers certainty and near immediate completion. Arthur does not,” board Chair Duane Brendemuhl said in a statement. “We have a long history of successful relationships with CHS as a member cooperative, a customer, a joint venture partner and an occasional competitor. ‘A bird in the hand’ is no small thing when it comes to transactions like this, and that is what we have with CHS.”
Based in Ulen, Minn., West Central Ag Services operates primarily in the Red River Valley. The cooperative had $767 million in revenue last year and turned a $41 million profit.
Arthur, a family-owned private company, said its offer represented a better payout for members and has “the strongest return on investment.” The company is confident it could quickly close a deal if West Central growers vote against the CHS acquisition.
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