I like the idea of either GNC making some acquisitions and becoming a more diversified company or in turn being taken over and becoming part of a larger operation. Economies of scale and spreading the risk across a more diversified business. However, CBH do not have a good track record with managing commercial subsidiaries and have a poor trading record on the east coast of Australia. They have also been distracted with infighting at Board level in recent years and being a cooperative, lack commercial acumen.
A better scenario would be a link-up of some kind with Aurizon and the GNC management remaining in place. They know their own system much better than the CBH Directors and management. The majority of CBH Directors are WA grain growers and won't know much about the east coast network. And I can tell you from experience, a lot of farmers are not very good at corporate governance when they end up on the Board of a company.
GNC Price at posting:
$6.10 Sentiment: Hold Disclosure: Held
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