Archer Daniels Midland sweetens offer for Australia’s GrainCorp to $2.9 bn
04 Dec 2012
US agriculture giant Archer Daniels Midland (ADM) yesterday raised its bid for GrainCorp Ltd, to $2.9 billion, two weeks after the Australian grains handler rejected its earlier $2.77 billion cash bid as too low.
Illinois-based ADM, which seeks to expand outside the US, raised its offer by 3.8 per cent from A$11.75 per share to A$12.20 per share, a 40-per cent premium to GrainCorp's share price at the time of the initial offer on 21 October. (See: Archer Daniels launches $2.77-bn bid for rival Graincorp)
On 14 November GrainCorp reported a record annual net profit, aided by a bumper harvest, rejected ADM's $2.77 billion takeover offer on the same day, saying that the bid price undervalued the company.
ADM, which already held a 4.9-per cent stake in Graincorp, had acquired an additional 10 per cent for A$11.75 per share, a few days before tabling the bid.
Yesterday it said that it has aacquired additional 5 per cent stake, taking its total holding in GrainCorp to 14.9 per cent and has received approval from the Australian Foreign Investment Review Board to acquire up to 19.9 per cent of GrainCorp.
ADM once again said that its offer was subject to several conditions, including exclusivity, due diligence, and a recommendation from the Graincorp board in favour of its bid.