The board of Australian grain trader GrainCorp has backed an improved takeover bid from US agri-giant Archer Daniels Midland, which values the company at around A$2.6bn (US$2.7bn).

The offer, for a total value of A$13.20 per share, would see GrainCorp shareholders receive A$12.20 in cash plus dividends totalling A$1, GrainCorp said in a regulatory filing. The offer price represents a 49% premium on the closing share price of A$8.85 on 18 October last year, the last trading day prior to ADM’s initial takeover approach.

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The GrainCorp board said they would back the offer as long as certain conditions are met, including the proviso that a higher proposal is not made by a competing bidder. The companies have entered into an Implementation Deed, allowing ADM to undertake a “limited scope” of due diligence.

Last October, ADM initially proposed a takeover of GrainCorp that valued the company at $13.55 per share. This was rejected by the group as undervaluing GrainCorp’s future potential worth.

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