GrainCorp dips on talk of takeover block

After reports PM could block takeover, grain handler reaffirms ASX compliance, Labor urges decision on merit.

GrainCorp (GNC) has told the market it remains in compliance with its continuous disclosure obligations after its share price fell as speculation swirled that Prime Minister Tony Abbott could block a takeover bid.

At 1440 AEDT, GrainCorp shares fell 4.84% to $11.60 against a benchmark lift of 0.82%.

In a statement to the Australian Securities Exchange, GrainCorp noted media speculation about the proposed takeover from US food giant Archer Daniels Midland Company, saying it was not aware of any material information that had not been disclosed.

The group noted its earlier announcement that a decision on the takeover will be made by Treasurer Joe Hockey, after reports today that Mr Abbott could intervene to prevent the foreign takeover of Australia's largest agribusinesses despite support for the bid by his Liberal colleagues.

Mr Hockey needs to make a decision about the $3.4 billion bid by December 15.

Labor concerned about PM's possible veto

Reports Mr Abbott will intervene to stop the takeover are "extremely concerning", opposition leader Bill Shorten and shadow treasurer Chris Bowen said in a statement.

"It’s critical the foreign investment process is independent and free from political interference, whether it’s from the Prime Minister, Warren Truss or Barnaby Joyce," they said.

"The GrainCorp decision should be assessed on its merits and whether it’s in Australia’s national interest.

"The Prime Minister must guarantee he will not interfere in this process."

Liberals divided on ADM bid

Coalition figures say Mr Abbott is inclined to say no to the purchase or make conditions so onerous as to make it unviable, The West Australian said today.

The takeover is being opposed by The Nationals, some rural Liberals and eastern wheat-belt growers.

But WA Liberal senator Dean Smith, like others in the nation's biggest wheat-growing state, is backing the ADM bid.

"This deal... ticks a lot of boxes for the 21st century," he told parliament yesterday.

Australia was a big exporting country and needed the "absolute best infrastructure" and best global connectivity.

"We need competition - this is the absolute imperative that underscores everything."

Senator Smith said debate about foreign investment should not be used as a Trojan horse by those seeking to reverse the benefits of deregulating the wheat export market.

He rejected claims by opponents of the sale that GrainCorp operated a grains handling and export monopoly on the east coast.

"This is simply wrong."

More than half of the east-coast harvest bypassed GrainCorp's export supply chain while there was a score of export buyers and its bulk port facilities had four competitors.

As well, the $40-60 million investment ADM was committed to was far larger than GrainCorp could make, Senator Smith said.

GrainCorp and ADM executives are expected to appear before a resumed Senate inquiry into the takeover.

Liberal senator Bill Heffernan has vowed to ask "difficult" questions.

"The debate so far has been informed by lobbyists with work-shopped words and a series of lunches," he told The West Australian.

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