2141 GMT [Dow Jones] GrainCorp (GNC.AU) shares are set to plunge Friday after Australian Treasurer Joe Hockey rejected Archer Daniels Midland's (ADM) A$3 billion takeover bid for the bulk grain handler. U.S. hedge funds will be shocked by the decision, which comes well before a Dec. 17 deadline. While they had trimmed the probability of a deal going ahead after a recent press report saying the government was inclined to reject it, most hedge funds were confident it would be approved. GrainCorp shares are likely to lose all of their takeover premium when trading resumes, suggesting it could fall as much as 22% to the pre-takeover level of A$8.70. Response from the company is awaited. GNC last A$11.20.
GNC Price at posting:
$11.20 Sentiment: None Disclosure: Not Held
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