Buoyant GrainCorp is sitting pretty
GrainCorp is now the "prettiest girl in town" and won't be settling for second best, its chairman says.
Second best, in this instance, is a $2.8 billion takeover offer from US food giant Archer Daniels Midland.
GrainCorp, Australia's largest remaining listed agribusiness, pointed to its third consecutive record profit at Thursday's annual meeting.
It also highlighted the company's positive outlook underwritten by rising demand for protein in Asia.
"I want to emphasise that the board has been totally focused on shareholder interests at all times," chairman Don Taylor said. "The board ... will be constructive in any dealings in relation to proposals that may have the potential to maximise shareholder value."
Chief executive Alison Watkins said that although it was too early to provide a financial forecast, "the message is overall a comfortable one" for the 2013 financial year.
The comments come after Ashok Jacob, the investment adviser of former major shareholder Ellerston Capital, criticised the GrainCorp board for failing to engage with ADM after it sweetened its original offer of $11.75 a share to $12.20.
But shareholders generally spoke in support of GrainCorp's decision to reject ADM, and the Australian Shareholders Association approved the company's remuneration report.
GrainCorp shares closed flat at $12.34, but are 63 per cent higher this year after soaring on news of ADM's original offer.
After GrainCorp this month declared that the $12.20 a share ADM bid "materially undervalued" it, ADM responded that it intended to "consider its options" in relation to its 19.9 per cent stake.
"The revised proposal represented a substantial premium to the prevailing GrainCorp share price at the time of our first approach," ADM said. Brisbane-based RBS Morgans analyst Belinda Moore yesterday backed the company's rejection of the ADM offer, saying that using other agribusiness takeovers as a guide, GrainCorp is worth $14.40 a share.
While the company's profit would likely fall in 2013, she wrote, it would be a "solid year for Graincorp and most likely the second strongest in its history".