Australian agribusiness giant GrainCorp has rejected Archer Daniels Midland's latest takeover bid for the company.

GrainCorp said ADM's A$2.8bn (US$2.96bn) offer "materially under-values" the business, the company said today (13 December).

ADM tabled its latest offer, worth A$12.20 a share in cash, last week. Its initial bid, made in November, was for A$11.75 a share.

The US group said its revised offer, when combined with a special dividend put forward by GrainCorp to its shareholders when it turned down the first ADM bid, meant it was tabling A$12.55 a share.

However, it was not enough to sway the GrainCorp board. "The increase in the proposed price has not changed the board's view that ADM's proposal materially undervalues GrainCorp. GrainCorp has advised ADM accordingly," it said.

ADM, which also increased its stake in GrainCorp to 19.9% last week, disagreed. A spokesperson said the offer gave GrainCorp shareholders "a substantial premium" to the company's share price when ADM first approached its target.

The spokesperson also said ADM's bid gave GrainCorp investors "more certainty" than the Australian firm's plans to increase EBITDA over the next four years by $110m, a strategy set out when the US group made its first bid.

"We believe that our revised proposal properly values GrainCorp's business, taking into account GrainCorp's 2012 results and its new initiatives announced on November 15. Our proposal offered more certainty, greater value and immediate realisation of potential future value for GrainCorp shareholders than GrainCorp’s stand-alone plan," the ADM spokesperson said.

She said ADM would "consider all our options" on GrainCorp, including its 19.9% stake in the business.

GrainCorp stood by its strategy. "GrainCorp has a unique portfolio of integrated, strategic assets and is confident in its outlook and strategy to continue to deliver shareholder value," it said in a statement.

It added: "GrainCorp's board will be constructive in any dealings in relation to proposals that have the potential to be in the best interests of shareholders."