Shares in Legumex Walker more than doubled after the Canada-based canola-to-pulses processor heralded deals which allow it to be wound up - and return at least Can$40m to shareholders.
Legumex Walker shares soared 142% to Can$2.18 in morning deals in Toronto, after the group revealed a plan which would see it dispose of both its profitable special crops processing division, and its majority stake in the loss-making Pacific Coast Canola canola crushing enterprise.
The group agreed to sell its special crops division to US-based Scoular, the flour-to-pet foods group which agreed a tie-up with Legumex Walker last year, which included a Can$16.5m investment in convertible bonds in the Canadian group.
Scoular is to pay Can$94m plus a further sum to account for working capital – an equation which Legumex said equalled a total of Can$174.6m, based on valuations at the end of June.
Legumex also said it had entered exclusive talks over a "possible transaction", with an unnamed buyer, to dispose of its 84% stake in the troubled Pacific Coast Canola business,
The company said that did "not expect to receive any value from the sale" of its stake in Pacific Coast Canola, which creditors have been circling after the business's woes triggered loan conditions.
However, the disposals would allow Legumex to wind up its operations and return to shareholders assets left over from the sale of the special crops division, once other liabilities had been paid off.
These liabilities include the repayment of Scoular's convertible bond.
Legumex announced a shareholder meeting in November to vote on the liquidation plan. which would see the return of an estimated Can$2.50-2.75 per share to investors.
With the group having issued 16.3m shares, according to Reuters data, that equates to some Can$40m-45m.
Bruce Scherr, the Legumex Walker chairman, said the deal to sell special crops division "represents excellent value".
Joel Horn, the group's chief executive, said that "coming off a record year for special crops, we are proud that an organization of the calibre of Scoular recognises the value that we have created".
At Nebraska-based Scoular, which has long held plans for Canadian expansion, chief operating officer Bob Ludington termed the acquisition "a highly-strategic addition to our existing global feed and food ingredient merchandising business".
Mr Ludington added: "The transaction will significantly increase our product and geographic footprint, which in turn will increase our ability to serve new and existing customers worldwide."