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GrainCorp agrees on takeover offer | Updated: 5:04:16 PM, Monday April 29, 2013
GrainCorp will recommend its shareholders accept the latest takeover offer by US food processing giant Archer Daniels Midland.
GrainCorp on Friday said it had reached conditional agreement with ADM on the takover.
In a statment on its website on Friday, ADM confirmed it had signed a takeover bid implementation deed with GrainCorp and begun due diligence on the Australian company.
‘Subject to the satisfactory completion of this due diligence, ADM has agreed to make a cash offer, which would be unanimously recommended by the GrainCorp board, to acquire the company for $A12.20 per share,’ ADM said.
‘Under the terms of the bid implementation deed, GrainCorp will pay to its shareholders dividends out of current and retained earnings of the business prior to the transaction close.
‘We are pleased to have reached agreement with GrainCorp to conduct due diligence and, subject to that due diligence, put a recommended offer before GrainCorp’s shareholders,’ said ADM chairman and chief executive Patricia Woertz.
‘GrainCorp is a leader in the Australian agribusiness sector. Should the offer proceed, the addition of GrainCorp to our global network would fit our strategy and help to further connect Australia’s growers with growing global demand for crops and food, particularly in Asia and the Middle East.’
The agreement permits ADM to undertake due diligence on GrainCorp for a seven-day period.
Subject to its satisfactory, ADM will announce whether the potential offer will proceed or be terminated.
Should it proceed, ADM will announce the takeover bid to GrainCorp shareholders.
‘GrainCorp has advised that such an offer would be unanimously recommended by the GrainCorp board, subject to there being no superior proposal, an independent expert confirming that the offer is fair and reasonable, and the regulatory conditions for the acquisition being satisfied or waived by December 31, 2013,’ ADM said.
If it does proceed, GrainCorp will pay its shareholders, prior to the transaction’s completion, dividends totalling $A1.00 per share.
‘The potential offer would imply an aggregate transaction value of $A3.4 billion, including GrainCorp’s net debt,’ ADM said.
The transaction value reflects the weighted average cost of acquiring the initial 19.8 per cent stake in GrainCorp at an average of $A11.24 per share and the outstanding shares of GrainCorp at $A12.20 per share.
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