GrainCorp investors get jitters
GrainCorp shares fell 46¢ to close at $11.73, after hitting a low of $11.41.
Last week, Treasurer Joe Hockey said he would not be bullied in his deliberations over the bid, and he would decide by December 17 whether it could proceed.
As Treasurer, he has the right to make the ultimate decision whether the sale is in the national interest.
Mr Hockey's comments followed a statement by Nationals leader Warren Truss, which highlighted the importance of food security, along with grains infrastructure. The National Party is opposed to control of the company going overseas, as are some Liberal MPs in rural seats.
"If we don't own any of the supply chain, it'll be very difficult for us to ever make decisions which can in fact influence whether or not our grain industry is to prosper," Mr Truss said in a recent interview.
Rural lobby groups such as farmers' federations have also been pushing for the sale to be blocked or, if it is approved, for restrictions to be placed on some of the GrainCorp assets.
GrainCorp's managing director, Alison Watkins, denied food security was an issue for Australia.
"Australia, of any country in the world, has the least concerns of food security," she said on Thursday, when discussing GrainCorp's most recent earnings.
The company is the dominant domestic grains handler, responsible for more than 50 per cent of the crop across eastern Australia. It runs a network of grain ports, most of which are regulated by the Australian Competition and Consumer Commission.
"The Prime Minister must guarantee he will not interfere in this process," shadow treasurer Chris Bowen said in a statement.
GrainCorp and ADM executives are expected to appear before a resumed Senate inquiry into the takeover.
On Thursday, GrainCorp reported a severe profit downturn, posting a net profit of $140.9 million for the year to September, down from $204.9 million a year earlier.
Frequently Asked Questions about this Article…
GrainCorp shares fell due to speculation that Prime Minister Tony Abbott might not support the $3.4 billion takeover bid by US grain trader Archer Daniels Midland.
The Treasurer, Joe Hockey, has the ultimate authority to decide if the GrainCorp sale is in the national interest, with a decision expected by December 17.
Nationals leader Warren Truss and some Liberal MPs oppose the takeover due to concerns about food security and the control of grains infrastructure going overseas.
GrainCorp is the dominant domestic grains handler, managing over 50% of the crop across eastern Australia and operating a network of grain ports.
Rural lobby groups, including farmers' federations, are pushing for the sale to be blocked or for restrictions to be placed on some of GrainCorp's assets if the sale proceeds.
GrainCorp reported a severe profit downturn, with a net profit of $140.9 million, down from $204.9 million the previous year, which may influence investor sentiment regarding the takeover.
GrainCorp's managing director, Alison Watkins, stated that Australia has the least concerns about food security, countering arguments against the takeover.
GrainCorp and ADM executives are expected to appear before a resumed Senate inquiry into the takeover, which will further scrutinize the bid.
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