Farmers Edge’s majority shareholder is looking to buy the remaining shares of the digital agriculture company for a small fraction of the value of the company when it went public less than three years ago.
Fairfax Financial Holdings, which holds a 61 per cent stake in Farmers Edge, has made a non-binding offer to purchase the remaining shares at C$0.25 a piece — a nearly 99 per cent drop from the $17 per share price at the company’s initial public offering in March 2021.
“The company’s discussions with Fairfax are at a preliminary stage, and no decision has been made by the company as to any potential transaction. There can be no assurance that any transaction will take place and no timetable has been set for completion of any transaction,” says Farmers Edge, in a statement.
The Farmers Edge board has formed a special committee to evaluate the offer and explore potential alternatives, including keeping the status quo. The company says it doesn’t expect to make any further public comments unless this committee approves a specific action.
The company also announced a $6.3 million increase to its credit facility with Fairfax last week, with the principal amount now at approximately $81 million, with a maturity date of January 31, 2025.
“We deeply appreciate Fairfax’s collaboration and support in extending and expanding our credit facility during this transformative phase of our journey,” said Vibhore Arora, CEO of Farmers Edge.
Farmers Edge was founded as an agronomic service business in Pilot Mound, Manitoba in 2005, and grew into a multinational digital agriculture company providing sensor technology aimed at helping farmers make decisions on more than twenty million acres of farmland in more than half a dozen countries.
Farmers Edge announced a third-quarter loss of $17.9-million earlier this month, down from a $21.1 million net loss during the same quarter last year.