“GrainCorp Ltd. (GNC), the largest grain handler in eastern Australia, rejected Archer-Daniels-Midland Co. (ADM)’s higher A$2.8 billion ($3 billion) bid as too low.
“The increase in the proposed price has not changed the board’s view that ADM’s proposal materially undervalues GrainCorp,” the Sydney-based company said today in a statement. “GrainCorp’s board will be constructive in any dealings in relation to proposals that have the potential to be in the best interests of shareholders.”
ADM raised its bid by 3.8 percent last week as it seeks control of the only major publicly traded grain merchant in Australia. A successful deal would give the world’s largest corn processor control of seven of the eight ports that ship grain in bulk from the east coast of Australia, the second-biggest wheat exporter.
“It was very unlikely that GrainCorp would get won over by such a small sweetener,” Peter Esho, Sydney-based chief market analyst for City Index Ltd., said by phone. “While the momentum is behind the business I think shareholders will be quite pleased to let the board either seek out another interested party or continue to talk up the business.”
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