GrainCorp investors get jitters
Shares in takeover target GrainCorp slumped on Friday over speculation that Prime Minister Tony Abbott is reluctant to support the $3.4 billion bid launched by the US grain trader Archer Daniels Midland.
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.
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