January 8, 2013
Australia’s largest agricultural company, GrainCorp, continues to trade at elevated levels as US agribusiness giant Archer Daniels Midland considers whether to increase its takeover offer. Shares in GrainCorp climbed nearly 40 per cent to $12.30 on October 22 after the takeover proposal was made, The Australian Financial Review reports. ADM’s second offer at $12.20 a share – following the initial one at $11.75 – was rejected, with GrainCorp chairman Don Taylor saying it “materially undervalued” the company. GrainCorp’s winter grain crop – primarily wheat, barley and canola – has mostly been gathered, with 9.4 million tonnes collected so far. Morningstar analysts said in a note to clients that the gathered crop was slightly higher than expected. They increased their forecast for GrainCorp’s net profit after tax by 4 per cent. But they said they expected the share price to fall from its current level if ADM did not make a further offer and if no other bidder emerged. ADM holds a 19.9 per cent stake in GrainCorp.