09:16 AM EDT, 05/29/2024 (MT Newswires) -- Ag Growth International ( AGGZF ) responded Wednesday to a recent media report related to the receipt of an unsolicited proposal to purchase it.

In a statement it said: "While it is AGI's policy not to comment on market speculation or rumours, AGI confirms that it received an unsolicited, non-binding and conditional proposal to purchase the company, which the board of directors, in consultation with financial and legal advisors, thoroughly considered and determined was not in the best interests of AGI or its shareholders. AGI is not in discussions with any third party, nor is there any agreement, understanding or arrangement with respect to any proposal".

It added: "The company does not intend to make any further public announcements regarding any rumours or speculation unless it determines that disclosure is warranted and in accordance with the requirements of applicable law."

National Bank in noting the report in The Globe and Mail newspaper that AFN received an unsolicited offer from an unnamed party said at the implied 35% premium, "it would materially undervalue the business." According to National, this morning AFN management had confirmed that the board officially rebuffed the offer.

For National, it believes selling now at $62 per share would not be in the best interest of long-term shareholders. AFN last traded on the TSX at $46.02.

Bottom line for National Bank, the ag cycle is "one of the most depressed parts of the market now" and "buying into the likely bottom makes sense to us". It said "while the everything rally continues, the ag cycle has been left in the dust". National believes "we are closer to the bottom here, creating an interesting/compelling risk/reward skew for the sector and AFN in particular". National reiterated its Outperform rating and $77 target price (using a 7.5x EV/EBITDA multiple on 2025E forecasts). It noted shares are currently trading at 5.6x 2025E EV/EBITDA.