Higher offer for GrainCorp unlikely, says Grant Samuel
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US agribusiness ADM has made the offer for GrainCorp, which independent expert Grant Samuel estimates to be worth as much as $13.97 a share.
ADM is to pay $12.20 in cash with the balance paid in dividends.
GrainCorp shares closed up 3¢ at $12.50 on Monday in a weaker sharemarket.
Despite recommending shareholders accept the ADM takeover, Grant Samuel said a higher offer could emerge for the company
"It is conceivable that a third party could make a higher offer for GrainCorp: GrainCorp has a number of important strategic attractions for international grain companies, including its unreplicable asset base and ownership of seven out of the eight major grain export terminals in eastern Australia; there is no structural or absolute impediment to an alternative acquirer," the adviser said. "While there is a 'no-shop' agreement, GrainCorp can respond to unsolicited proposals from other parties."
ADM holds a 19.85 per cent shareholding in GrainCorp which could deter other suitors, although "it would not stop a determined bidder" launching a counter offer.
"Potential bidders may have been waiting: to see ADM Australia's full offer price; and/or to see the baseline price at which GrainCorp directors would recommend an offer; and there remains plenty of time for an alternative bidder to come forward," Grant Samuel said.
Even so, it said the prospect of a rival bidder emerging was unlikely, as ADM had announced its intention to bid several months ago and there has been no response from other possible bidders.
GrainCorp handles around three-quarters of the east coast's grain harvest, as well as owning the export terminals, providing any acquirer with an "end-to-end" network, the Grant Samuel report said.
Directors have recommended shareholders accept the ADM offer in the absence of a higher bid.
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