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Viterra Inc. took another step toward buying Australia's ABB Grain Ltd. after ABB shareholders approved the $1.5-billion deal on Wednesday - but where does the deal leave Viterra shareholders?

Shares of the Canadian grain handler - formerly known as Saskatchewan Wheat Pool before its 2007 takeover of Agricore United - have been on a wild ride since its ABB takeover intentions were made public at the end of April. They rose 21.5 per cent by mid-June, then fell 14.1 per cent by mid-August, only to rebound recently by 11.5 per cent.

On Wednesday afternoon, the shares traded at $9.45, up 28 cents or 3.1 per cent - suggesting that investors are relieved that a deal is imminent (it still requires the blessings of the Federal Court of Australia, expected on Thursday).

According to Keith Carpenter, an analyst at Canaccord Adams, the shares should continue to perform well: He maintained a "buy" recommendation on Viterra with a 12-month price target of $11.50, implying a 27-per-cent gain from the current level.

"The transaction would allow Viterra increased access to the growing regions of Asia, namely China and India, which would result in increased sales to those regions and better overall margins," he said in a note.

Viterra's management has said that the deal will allow the merged entity to shave off $30-million (Australian) from the cost of its operations within two years of closing the deal.

Mr. Carpenter estimated that cost savings will total $15-million (Canadian) in fiscal 2010, but outlined two takeover scenarios that differ by the number of shares issued by Viterra to finance the deal. Under a scenario with just 39.1 million shares issued, Viterra's earnings should hit 84 cents a share in fiscal 2010. Under a scenario with 78.3 million shares issued, earnings will probably hit 76 cents a share.

"We believe the actual result may be closer to 80 cents," he said. "As such, we envision the acquisition, as proposed, as being marginally accretive in fiscal 2010 to our Viterra stand-alone EPS estimate of 77 cents and increasingly accretive thereafter."

Five analysts, including Mr. Carpenter, who have updated their thoughts on Viterra maintained their recommendations and target prices on the stock. Three have "buy" recommendations while two have "sector perform" recommendations. The average target price is $11.25.

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