ADM Makes All-Cash Offer for Australia’s GrainCorp

Commodities & Metals

Published: June 24, 2013 8:20 am

Last Updated: April 27, 2020 3:13 pm

U.S. agribusiness giant Archer Daniels Midland Co. (NYSE: ADM) this morning announced that its Australian subsidiary has offered to buy the approximately 80% of Australia’s GrainCorp Ltd. that it does not already own for AUS$12.20 (about US$11.20) a share in cash. The offer values GrainCorp at about $4.3 billion.

GrainCorp’s shareholders will also receive a dividend of AUS$1.00 per GrainCorp share.

Only 50.1% of outstanding shares are needed to approve the deal, including the 19.85% that ADM already owns. ADM’s tender offer is good until August 31.

ADM first made this offer in December, and GrainCorp has been unable to turn up a better offer. The U.S. firm said that GrainCorp’s board will recommend the offer to shareholders “in the absence of a superior offer.” ADM noted that GrainCorp had turned down two previous offers.

When ADM made its first offer, it seemed that other major agribusiness players like Cargill, Bunge Ltd. (NYSE: BG), Wilmar International and even commodities trading houses would be interested in bidding for GrainCorp.

ADM said last week that it is looking for a buyer for its cocoa business, which accounts for about $3.7 billion (or 4%) of the company’s revenue.

Shares of ADM stock are inactive this morning, after closing at $33.09 on Friday, in a 52-week range of $24.38 to $35.04.

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