GrainCorp shareholder Archer Daniels Midland Company (ADM) launches a conditional takeover bid for $13.20 per share
April 26
GrainCorp shareholder Archer Daniels Midland Company has launched a conditional takeover bid for $13.20 per share.
The
US-based agribusiness and transporter, which currently owns 19.8 percent of GrainCorp’s shares has upped its offer 15 percent since its first approach in
October last year.
Subject to due diligence, GrainCorp’s board will agree to recommend the off-market takeover offer in the event there is no superior proposal and that the ADM offer is deemed fair by an independent expert.
ADM will undertake its due diligence until 2 May 2013 with the understanding that regulatory conditions, including approval from the Foreign Investment Review Board and the Chinese Ministry of Commerce must be satisfied by 31 December 2013.
The $13.20 payable to shareholders represents a premium of about 50 percent to the price of GrainCorp’s shares as of their closing price of $8.85 on 18 October 2012 prior to ADM’s initial proposal.
GrainCorp has agreed to restrictions that prohibit it from seeking competing proposals and is required to give ADM two days to match
any superior proposal which does arise.
GrainCorp Chairman Don Taylor says the ADM offer highlights
GrainCorp’s strategic value.
“Our
business
has unique assets,
a program of strategic initiatives being undertaken and enviable proximity to the fast growing Asian markets,” taylor says.
“GrainCorp will work with ADM to ensure that its due diligence requirements can be satisfied, following which a takeover offer would be made on the terms agreed.
“Assuming this is achieved, the GrainCorp board of directors intends to unanimously recommend the ADM offer.”
ADM Chairman and CEO Patricia Woertz adds the GrainCorp business fits with ADM’s strategy and will help to further connect Australia’s growers with global demand for crops and food, particularly in Asia and the Middle East.
“ADM and GrainCorp have complementary geographies with little overlap and highly compatible cultures,” Woertz says.
“We look forward to working with the GrainCorp team and Australian growers to build on their history of success.”
“We anticipate that the offer will be cash accretive in the first full year and will meet our key financial objectives.
ADM’s 30,000 ADM employees around the globe convert oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses.
With more than 265 processing plants, 460 crop procurement facilities, and one of the world’s major crop transportation networks, ADM helps connect the harvest to the home in more than 140 countries.