Agribusiness & Food, Logistics, Ports & Terminals

New treasurer good for Asciano, Graincorp takeovers?

Scott Morrison. Photo: file

Stock price bumps to both Asciano and Graincorp may suggest new treasurer Scott Morrison is good news for foreign businesses swooping on major Australian firms.

A takeover bid from US firm Archer Daniels Midland of Graincorp last year was famously shut down at the eleventh hour by Joe Hockey, in his role as treasurer under prime minister Tony Abbott.

Hockey, who was rejecting his first foreign takeover bid after approving all those prior, said he was responding to “a high level of concern from stakeholders and the broader community,” adding, “Now is not the right time for a 100% foreign acquisition of this key Australian business.”

Six days after he wrestled prime ministership off Tony Abbott, new PM Malcolm Turnbull announced on Sunday that Hockey would step down, to be replaced by former social services minister Scott Morrison.

In the ten days since Turnbull announced his leadership move, Graincorp shares have risen from roughly $8.10 to $8.72 this morning.

Several media sources are tipping ADM to make a new bid for the Australian grains business by the end of the year, with speculation in the region of a $3 billion offer.

The Morrison move looks to have also boosted confidence in the acquisition of ports and rail business Asciano by Bermuda-based infrastructure investor Brookfield Infrastructure Partners.

BIP has a standing $9.15 a share cash and scrip offer to buy Asciano, and is currently in talks with shareholders, and regulatory authorities, following approval of Asciano’s board in August.

Shares in the Australian infrastructure and logistics business also bounced with the leadership change, from $8.17 a share on September 14, up to roughly $8.50 late last week, and settling around $8.35 today.

“[The Asciano deal] is going to be one of the few big decisions [the Turnbull Government] is going to have to make once in office,” Rivkin Local chief investment officer Shannon Rivkin was quoted as saying by AFR. “It’s probably unlikely they’re going to come out with a big rejection when at least at first glance it doesn’t look like there is any real reason to do so anyway.”

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