GrainCorp: pretty girls can say no
GRAINCORP is now the "prettiest girl in town" and will not 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 and a 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 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 supported GrainCorp's rejection of ADM, and the Australian Shareholders Association approved the company's remuneration report.
GrainCorp shares closed flat at $12.34, but they are 63 per cent higher through 2012 after soaring on news of ADM's original offer.
After GrainCorp this month said the $12.20 a share ADM bid "materially undervalued" it, ADM responded that it would "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 on Thursday 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.