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Listed bulk grain handler Graincorp has received a $2.4 billion takeover proposal from a consortium led by former Business Council of Australia president Tony Shepherd as it heads into an "extremely challenging" 2019.
Little-known fund manager Long-Term Asset Partners (LTAP) made an unsolicited, all-cash offer of $10.42 a share on Monday, a 42 per cent premium to Graincorp’s Friday closing price of $7.30 a share.
An Australian consortium has made a $2.4 billion takeover offer for agribusiness Graincorp.
The bid comes at a time when Australia is facing one of its worst harvest seasons due to the long-term impact of a drought across the east coast, which saw Graincorp's profit nearly halve.
"The 2019 financial year will be extremely challenging for GrainCorp with expectations of a substantially smaller (east coast) crop due to the current drought," chief executive Mark Palmquist said last month.
Graincorp’s share price skyrocketed more than 30 per cent to $9.73 following news of the offer.
The bid is the first proposed investment by LTAP, which is led by Mr Shepherd, Huawei Australia director and former boss of rail haulage Aurizon Lance Hockridge, former Aurizon director Andrea Staines, and Chris Craddock, who has been the managing director of LTAP since 2016.
LTAP said a key aspect of the takeover was that it would not split up Graincorp.
“The structure has been established to make long-term investments and [LTAP] does not intend to sell any of the assets of Graincorp should the proposal be recommended,” LTAP said.
"An acquisition by LTAP ensures ownership and control by an Australian-owned entity with a plan for the long-term development of Graincorp's assets and operations."
This article first appeared on www.theage.com.au
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