Growers wait for more detail on GrainCorp bid

Growers wait for more detail on GrainCorp bid


Agribusiness
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Growers remain neutral regarding the shock bid by an unknown asset management business to buy GrainCorp, saying more info is required.

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Brett Hosking, Grain Growers chairman, is awaiting more detail about the Long Term Asset Partners' bid for GrainCorp.

Brett Hosking, Grain Growers chairman, is awaiting more detail about the Long Term Asset Partners' bid for GrainCorp.

GRAIN growers down the east coast are waiting for more detail about Long Term Asset Partners (LTAP) and their vision for GrainCorp before endorsing or opposing the company’s takeover bid of the east coast bulk handling giant.

The grains industry was abuzz with the news that LTAP had lodged a bid valuing GrainCorp at $2.4 billion on Monday, with leaders scrambling to find out more about the unknown business.

RELATED: GrainCorp bid launched

Brett Hosking, Grain Growers chairman, said the initial communication from LTAP had been positive but said farmers would like to know they were dealing with a secure business before throwing in their lot with the fledgling company.

“It was great to hear them make the right noises regarding all-Australian management and a focus on serving farmers but we really need to know more about their vision for GrainCorp.”

He said growers would be influenced by how any changes would impact their farming business rather than their GrainCorp shares.

“Most people will look at this as stakeholders, rather than shareholders, they want to know how the network will work, how they will generate efficiencies in the supply chain and whether they will pass any savings on to grower customers,” Mr Hosking said.

He said even though GrainCorp’s share of the east coast bulk handling market has been slipping over the past few years, due to the rise of on-farm storage and smaller private bulk handlers they were still a market leader.

“They still have a very strong position with their ports and supply chain and they set the market to an extent, so what happens with them influences all grain producers, even if you don’t deliver a single load to them.”

“Grain growers want to know they are dealing with people they can trust.”

Russell Heard, a Wimmera farmer who was a vocal critic of the ADM bid to buy GrainCorp in 2013, said it was too early to form an opinion.

“Farmers want a successful GrainCorp, we will be looking at this company and checking to see what their connections are and whether they have the best interests of growers in mind before supporting it.”

“At this stage there is not as much emotion in it all as there was with the ADM bid as we knew ADM’s bad track record, for now we just need to find out what this company wants to do in more detail.”

Terry Fishpool, Tottenham, NSW, said he believed the offer, valuing GrainCorp at $2.4 billion was fair, even though it is below the company’s pre-drought highs.

“We’ve seen what can happen in the bad years and where the price has headed so their offer, at a significant premium to what we see now, is probably OK.”

He said he was looking to hear more about LTAP’s view on long term investment in the GrainCorp business, in particular the supply chain.

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