US: ADM ups takeover bid for GrainCorp

By Dean Best | 3 December 2012

  • ADM ups bid for GrainCorp
  • GrainCorp turned down offer last month

Archer Daniels Midland has increased its takeover for Australian rival GrainCorp, which has so far rejected the US agribusiness giant's interest.

ADM has tabled an offer worth A$12.50 a share, up from the A$11.75 GrainCorp turned down last month.

The US group said it would also allow GrainCorp shareholders to keep a dividend worth A$0.35.

"We consider that our revised non-binding proposal reflects the value of GrainCorp’s business, taking into account GrainCorp's 2012 results, its new initiatives announced on November 15, and its recently announced ordinary and special dividends totalling A$0.35. Our proposal also offers more certainty, greater value and immediate realisation of potential future value for GrainCorp shareholders than GrainCorp’s stand-alone plan," chairman and CEO Patricia Woertz said.

Last month, after rejecting ADM's A$2.7bn (US$2.8bn) bid, GrainCorp set out plans to increase EBITDA by A$110m over the next four years and issued a plan for a special dividend. 

Show the press release

ADM Makes Revised Proposal to Acquire GrainCorp Limited for A$12.20 a Share

ADM Increases Investment in GrainCorp Limited to 19.9 percent

SYDNEY--(BUSINESS WIRE)--Archer Daniels Midland Company (NYSE: ADM) has delivered to GrainCorp Limited (ASX: GNC) a revised non-binding proposal, with the aim of arriving at an agreement with GrainCorp’s Board of Directors under which they would recommend to GrainCorp shareholders an acquisition by ADM of all of GrainCorp for A$12.20 a share in cash, with shareholders keeping the dividend of A$0.35 announced on Nov. 15.

“ADM is a disciplined buyer, and any combination with GrainCorp must meet our key financial hurdles, taking into consideration the impact of the Australian agricultural cycle on GrainCorp’s earnings power.”

ADM’s revised non-binding proposal is subject to GrainCorp granting ADM access to conduct confirmatory due diligence, completion of that due diligence satisfactory to the ADM Board, and a recommendation from the GrainCorp Board. ADM is ready to commence due diligence immediately and expeditiously. Any agreement to acquire GrainCorp shares would also be subject to limited conditions which are available at on the company website www.adm.com.

“We consider that our revised non-binding proposal reflects the value of GrainCorp’s business, taking into account GrainCorp’s 2012 results, its new initiatives announced on Nov. 15, and its recently announced ordinary and special dividends totaling A$0.35. Our proposal also offers more certainty, greater value and immediate realization of potential future value for GrainCorp shareholders than GrainCorp’s stand-alone plan,” said ADM Chairman and CEO Patricia Woertz. “ADM is a disciplined buyer, and any combination with GrainCorp must meet our key financial hurdles, taking into consideration the impact of the Australian agricultural cycle on GrainCorp’s earnings power.”

ADM’s proposed price represents a material increase of A$0.80 from the initial proposal of A$11.75 made on Oct. 19, after allowing for the recent dividends totaling A$0.35. The revised non-binding proposal represents1:

  • a 39.6 percent premium to the last closing price of GrainCorp shares of A$8.74 on Oct. 18;
  • a 38.8 percent premium to the one-month, volume-weighted average GrainCorp share price of A$8.79 up to Oct. 18;
  • a 35.7 percent premium to the six-month, volume-weighted average GrainCorp share price of A$8.99 up to Oct. 18; and
  • a 45.9 percent premium to the twelve-month, volume-weighted average GrainCorp share price of A$8.36 up to Oct. 18.

As of Monday evening Sydney time, ADM held an economic interest in a total of 19.9 percent of GrainCorp shares. Since Oct. 18, ADM had held an economic interest in 14.9 percent of GrainCorp, and on Monday evening ADM acquired an additional 5 percent of GrainCorp’s outstanding shares for cash at a price of A$12.20 per share. ADM has received approval from the Australian Foreign Investment Review Board to acquire up to 19.9 percent of the shares in GrainCorp.

Original source: Archer Daniels Midland

Sectors: Commodities & ingredients, Mergers & acquisitions

Companies: Archer Daniels Midland

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