Graincorp worth more than ADM offer: adviser Date June 24, 2013 - 11:06AM (1) Read later Brian Robins
Graincorp shares could be worth more than the $13.20 a share takeover offer on the table, given the scarcity value of the grain handler's assets, shareholders were told this morning.
US bidder ADM is offering $13.20 cash a share for Graincorp shares, which Grant Samuel estimates to be worth as much as $13.97.
ADM is to pay $12.20 in cash with the balance of the offer to be paid in the form of dividends paid by Graincorp.
In mid-morning trading on the ASX, Graincorp shares were up 3 cents at $12.50, against the backdrop of a broadly weaker sharemarket.
Advertisement Despite recommending shareholders accept the takeover offer for their shares, Graincorp adviser Grant Samuel told shareholders in its valuation sent to shareholders today a higher offer could emerge for the company.
"It is conceivable that a third party could make a higher offer for Graincorp: Graincorp has a number of important strategic attractions for international grain companies including its unreplicable asset base and ownership of seven out of the eight major grain export terminals in eastern Australia; there is no structural or absolute impediment to an alternative acquirer," the advisor said.
"While there is a 'no-shop' agreement, Graincorp can respond to unsolicited proposals from other parties."
ADM has a 19.85 per cent stake in Graincorp which could deter other bidders, the adviser told shareholders, although "it would not stop a determined bidder".
"Prior to acting, potential bidders may have been waiting: to see ADM Australia’s full offer price; and/or to see the baseline price at which Graincorp directors would recommend an offer; and there remains plenty of time for an alternative bidder to come forward," Grant Samuel said.
Even so, the adviser said the prospect of a rival bidder emerging was not likely, since ADM announced its intention to bid several months ago with no response from other possible bidders.
ADM's bid is conditional on winning control of 50.1 per cent of the capital.
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