By Brooks Johnson, The Minnesota Star Tribune
The board of a western Minnesota cooperative said โCHS is the right fit for usโ 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 Centralโs board met with Arthur and CHS management last week and concluded the CHS deal is a โsuperior proposalโ that better met โpatron growersโ long-term supply and market objectives,โ according to a news release Monday.
West Central Ag Services members will vote on the board-backed CHS acquisition Nov. 26.
โCHS offers certainty and near immediate completion. Arthur does not,โ board Chair Duane Brendemuhl said in a statement. โWe have a long history of successful relationships with CHS as a member cooperative, a customer, a joint venture partner and an occasional competitor. โA bird in the handโ is no small thing when it comes to transactions like this, and that is what we have with CHS.โ
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 โthe strongest return on investment.โ The company is confident it could quickly close a deal if West Central growers vote against the CHS acquisition.
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