Sunday 26th May, 2019

LTAP pulls GrainCorp takeover bid

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

GrainCorp suitor Long Term Asset Partners (LTAP) has pulled out of its $3.3 billion takeover attempt, citing difficulties during due diligence.

LTAP chairman Tony Shepherd said on May 6 LTAP had been a “very serious bidder” when it made its non-binding offer to acquire GrainCorp on December 3 last year.

He noted the lengths LTAP had gone to secure a funding arrangement, and its formal engagement with a ratings agency and an internationally recognised insurer to back its proposed new business model.

But he said the due diligence process – which has been ‘slow’ and ‘patchy’, per the AFR – has led LTAP to back down from its takeover bid.

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“Had due diligence supported our operational assumptions, we are confident we would have turned the LTAP proposal into a binding offer as contemplated,” Shepherd said.

“GrainCorp provides a valuable service to the nation’s grain growers and we wish them well.”

GrainCorp, which operates a vast grain receival, storage and transport network, said it had engaged “extensively with LTAP to assist them as they undertook due diligence and sought to develop a binding offer capable of consideration and response by the GrainCorp board of directors”.

With the takeover bid now dropped, GrainCorp said it would continue with its own portfolio review.

Options being considered in GrainCorp’s internal review include demergers and combinations of various divisions, potential investments and other structural changes.