GrainCorp reviewing $2.4b takeover bid by Aussie asset group

GrainCorp, is weighing up a $2.4 billion takeover offer from an Australian investment syndicate.

The non-binding proposal from Long-Term Asset Partners involves an acquisition, via a scheme of arrangement of all GrainCorp shares at a price of $10.42.

That’s almost a third more than the share price for Australia’s biggest listed agribusiness when trading closed at the end of last week at $7.30/share. In late 2013 the federal government blocked a $3.4 billion takeover move for GrainCorp by US-based Archer Daniels Midland after deciding it was not in the national interest.

Newly- formed LTAP claims it does not intend to sell any of GrainCorp’s Australian or overseas assets should its proposal be recommended by directors and ultimately supported by GrainCorp shareholders.

GrainCorp’s board confirmed it would  engage with LTAP in the context of the company’s current portfolio review to further assess the merits of the scheme of arrangement proposal, including the value offered compared to other value creation alternatives and strategies available to GrainCorp.

Directors had not, however, formed a view on whether the price offered under the LTAP Proposal was at a level which they were prepared to recommend to shareholders in the context of a change of control. “Accordingly, the board recommends shareholders take no action in respect of the LTAP proposal and await further information from the board which will be provided as part of the ongoing portfolio review,” a company statement said.

“The Board requires additional information on the identity of the equity investors underpinning the LTAP proposal as well as the longer term financing plan and intentions for the business, to enable a detailed assessment of the impacts of the LTAP proposal on all of GrainCorp’s stakeholders including our shareholders, grower customers, trading partners and our people.”

GrainCorp stated because its own portfolio review was well progressed and the LTAP proposal was not sufficiently certain.