Status Report: UAP Holding - Agrium

Agrium Inc. (AGU) has again announced an extension of its tender offer for UAP Holding Corp. (UAPH), this time until April 30, 2008. AGU will also yet again withdraw and re-file the HSR notification due to continued discussions with the FTC. However, the companies have now disclosed the following:

As a result of informal discussions between Agrium and the staff (Staff) of the FTC since the original filing of its notification and report form, Agrium believes that Staff's concerns are limited to approximately a dozen UAP stores (out of a total of approximately 370 stores). Agrium plans to work with Staff in an attempt to further reduce or eliminate the stores of concern.

Agrium remains highly confident of a successful close to the transaction. Agrium believes that the closing of the transaction will occur by early summer of 2008.

The revelation of probable divestitures is of course not at all surprising and obviously shows that the companies have had very productive dealing with the FTC over the last two months.

While this must be considered a positive development overall -- the relatively small number of outlets is certainly not a major issue -- the very specter of divestitures suggests additional tender offer extension as a buyer or buyers must be found and a deal made for the divested operations. Completing the divestiture process to the FTC's satisfaction within the next six weeks is technically possible. However it would come as no surprise if the deal slipped into June or July of this year in order to complete the divestiture process.

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