Australia grain handler GrainCorp
Ltd. has rejected Archer Daniels Midland Corp.'s acquisition offer
of A$2.8 billion (US$3 billion) as too low, after also rejecting a previous, lower offer, according to reports.
According to ADM, the bid offers more certainty,
greater value and immediate realization of potential future value for GrainCorp
shareholders than the company's standalone plan. But GrainCorp said it believes
that ADM's offer materially undervalues GrainCorp.
“It is important for all
shareholders to be aware that the board remains focused on maximizing
shareholder value and will remain constructive in any dealings with relation to
proposals that have the potential to be in the best interests of shareholders,”
said GrainCorp chairman Don Taylor in a letter to shareholders.
ADM raised its stake in GrainCorp to 19.9 percent and said GrainCorp
shareholders would still be entitled to the 35 cents share dividend announced in
November. “ADM showed its hand by only slightly bumping up their offer,” said
Peter Esho, Sydney-based chief market analyst for City Index Ltd. “The
agribusiness space doesn’t always move in in a straight line. There will come a
point where GrainCorp earnings growth disappoints the market. ADM might see that
as an opportunity to then re-initiate its takeover.”
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