Wednesday 12th Dec, 2018

GrainCorp targeted in $2.4bn takeover bid

GrainCorp shed at the Port of Portland. Photo: David Sexton
GrainCorp shed at the Port of Portland. Photo: David Sexton

ASX-listed grain handling giant GrainCorp has received a $2.4 billion takeover offer.

GrainCorp, a major player in Australia’s east coast grain market, said on December 3 it had received a non-binding, indicative proposal for 100 per cent of GrainCorp’s shares from Long-Term Asset Partners (LTAP).

The deal is worth $10.42 per share, valuing GrainCorp at $2.4 billion. Over the last 12 months, GrainCorp has traded between $7.17 and $8.99 a share, but the price jumped on Monday morning to around $9.26.

LTAP’s directors are Lance Hockridge, former Business Council of Australia president Tony Shepherd, Chris Craddock and Andrea Staines.

Hockridge was the CEO of rail firm Aurizon for nine years until late 2016, and Staines formerly was a non-executive director of Aurizon.

GrainCorp said LTAP has put together a “complex financing structure” comprising $3.2 billion in acquisition facilities from Goldman Sachs, and $400 million from Westbourne Capital.

LTAP has told GrainCorp it intends to make long-term investments and not sell any of the assets of GrainCorp during the proposed takeover.

The grain handler’s board said it is yet to form a view on whether the price offered by LTAP should be recommended to shareholders.

“The Board requires additional information on the identity of the equity investors underpinning the LTAP Proposal as well as the longer term financing plan and intentions for the business, to enable a detailed assessment of the impacts of the LTAP Proposal on all of GrainCorp’s stakeholders including our shareholders, grower customers, trading partners and our people,” GrainCorp told the market.