GrainCorp, Australia's last remaining independent listed agribusiness, has rejected a sweetened takeover bid from US food giant Archer Daniels Midland, arguing the $2.8 billion offer does not sufficiently value it.
ADM's offer was increased to $12.20 this month, plus allowing shareholders to retain the 35 cent dividend, from $11.75 per share offered in October.
But GrainCorp said this morning the sweetened price had “not changed the board's view that ADM's proposal materially underalues GrainCorp”.
"GrainCorp has advised ADM accordingly,” it said.
"GrainCorp's board will be constructive in any dealings in relation to proposals that have the potential to be in the best interests of shareholders.”
"GrainCorp has a unique portfolio of integrated, strategic assets and is confident in its outlook and strategy to continue to deliver shareholder value."
In early trade today, GrainCorp shares were down 5 cents - 0.4 per cent - at $12.30.
The offer was subject to several conditions, including due diligence and regulatory approvals.
ADM increased its stake in GrainCorp to 19.9 per cent in early December, taking it near the 20 per cent threshold that automatically triggers a full takeover bid.
GrainCorp operates seven of the eight bulk grain elevators in eastern Australia, handling as much as 60 per cent of the region's wheat, barley, canola, chickpea and sorghum crops. It took in 12.2 million tonnes of grain last season.
Analysts have previously said the revised bid was still below the average acquisition multiple for Australian and global agribusinesses based on forward earnings.
ADM did not immediately respond to emails seeking commment.
Australian agricultural businesses have been targeted by big players in recent years, part of a global consolidation amid intense competition to feed fast-developing countries seeking food security.
GrainCorp is the last available independent asset of scale in Australia, the world's second-largest wheat exporter.
With Reuters, AAP