Australia’s largest grain processor and marketer, GrainCorp has formally rejected a takeover offer from US corporation, Archer Daniels Midland (ADM). The decision comes in the wake of Graincorp announcing its annual return, featuring a 19% hike in profits.
GrainCorp made a net profit of A$204.9 million in the year to September 30, up from A$171.6 million in the prior year.
ADM’s offer of A$2.68 billion for GrainCorp has been rejected by the board as it “…materially undervalues GrainCorp.”
In a statement, GrainCorp chief executive Alison Watkins says ADM’s offer undervalued her company’s competitive advantages in handling and processing wheat, barley and canola, as well as its assets. In all grains GrainCorp dominates the Australian industry.
“We’re very focused on getting on and running the business,” Watkins concludes.
“We’re really confident that GrainCorp’s got some great momentum and this kind of improvement will continue for the future,” she says.
All of the company’s business units contributed strong performances, and the future, with international grain prices buoyant, looks positive, prompting the board to declare its intention to spend A$250 million on generating an additional A$110 million in annual earnings by the end of fiscal 2016.