GrainCorp Ltd. could be up for a possible $3-billion takeover by US giant Archer Daniel Midlands Co. (ADM) after the latter seized up a 10 per cent controlling stake in Australia's largest listed grain trader.
GrainCorp Ltd. could be up for a possible $3 billion takeover by US giant Archer Daniel Midlands Co. (ADM) after the latter seized up a 10 per cent controlling stake in Australia's largest listed grain trader.
In a statement to the Australian Securities Exchange on Friday, GrainCorp declared that it had received notice from ADM of its purchase and that ADM "wishes to engage in discussions" towards a potential transaction. GrainCorp is one of Australia's last remaining independent grain traders, with a market value placed at A$2 billion ($2.07 billion).
Graincorp did not say how much ADM had acquired of the company.
The Financial Times said ADM bought the 10 per cent stake at a 33 per cent premium to Thursday's close of A$8.85. Data from the exchange showed a block of shares swapped hands early on Friday at A$11.75 a share.
ADM, however, had not yet made a formal proposal, GrainCorp said, noting it would review any proposal should the Decatur, Illinois-based ADM push through with its plans to maximise value for shareholders.
GrainCorp had requested its shares be halted effective this morning, and will remain in a trading halt until Tuesday.
"Given the scale and strategic nature of GrainCorp's assets and the fact that it is the last remaining significant grain company capable of being taken over in Australia, we expect a number of parties could be interested in GrainCorp and a bidding war may emerge," RBS Morgans analyst Belinda Moore said.
Founded in 1916, GrainCorp operates seven of the eight ports that ship grain in bulk from Australia's east coast. It was once under the Department of Agriculture of New South Wales' state government.
"Rural assets in Australia have been of interest to quite a variance of people," Jamie Spiteri said in Bloomberg News. "You've had interest out of the Arab states, out of India, you've had interest out of China and out of North America at different stages."
After its privatisation in the late 1980s, GrainCorp went to purchase state-focused Australian grain handlers such as Vic Grain, Grainco and Hunter Grain.
To contact the editor, e-mail:
Most Popular Slideshows
- Robert Pattinson-Kristen Stewart: Twilight Lovers To Bring Back Love at 2013 Cannes Festival [PHOTOS]
- Angelina Jolie Double Mastectomy: Other Celebrities Who Also Went Through the Surgical Procedure [PHOTOS]
- IN PHOTOS! A Picture of Sadness in Kristen Stewart as Robert Pattinson Celebrates 27th Birthday ALONE? [SLIDESHOW]
- Jaden Smith Clarifies Emancipation Reports with Dad Will Smith on TV Show ‘Ellen’ [PHOTOS AND VIDEO]