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Viterra says in exclusive sale talks, suitor unnamed

By Rod Nickel and Clara Ferreira-Marques

WINNIPEG, Manitoba/LONDON (Reuters) - Viterra said on Monday it was in exclusive talks with one prospective buyer, pushing its shares lower as the prospect of a bidding war for Canada's biggest grain handler diminished.

Viterra didn't identify the suitor, but industry sources have said Swiss-based commodities trader Glencore is developing a bid that would involve Canadian grain handler Richardson International Ltd and farm retailer Agrium Inc.

"I guess they've picked a winner from the bid process and now they're hammering out the details of the bid," said Jason Zandberg, an analyst at PI Financial Corp, who follows Viterra.

Zandberg said the exclusive talks would not preclude another suitor from making public an offer - presumably a hostile one - to sway investors.

It's also possible that there is only one party that is seriously interested, Zandberg said.

Viterra's shares slipped 1.3 percent to C$16.00 when they resumed trading at midday after being halted in Toronto, as it appeared less likely the company would receive several takeover bids, Zandberg said. Trading had been halted pending Viterra's statement.

Viterra said last week it was aware of press reports of interest at C$16 a share. On Monday, it said talks with its suitor are based on a price consistent with that statement.

At C$16 a share, its market vale would be about C$5.9 billion ($5.95 billion).

Glencore, Agrium and Richardson officials would not comment.

Shares of the Regina, Saskatchewan-based company have climbed by nearly half since March 9, when Viterra said it had received expressions of interest from third parties.

Winning Viterra would give a company access to Canada's canola, spring wheat, durum and oat supplies, just as the Canadian Wheat Board's marketing monopoly over wheat and barley is set to end later this year.

The Wheat Board has held its monopoly on Western Canadian wheat and barley for milling or export for 69 years.

A rapidly growing global population and rising middle class in some developing countries are expected to drive demand for grains higher over the long term, making major grain handlers and food processors such as Viterra more important.

Canada is the world's No. 8 grain producer.

Viterra's shares had closed at C$10.98 on March 8, the day before the company said it had received expressions of interest, which sent the stock skyrocketing.

In fiscal 2011, Viterra had net income of C$265 million on sales of C$11.79 billion.

($1=$0.99 Canadian)

(Reporting by Rod Nickel in Winnipeg, Clara Ferreira-Marques in London and Bangalore equities newsroom; Editing by Peter Galloway)

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