SYDNEY, AUSTRALIA — GrainCorp Ltd. is waiting for a “more certain proposal” from Long-Term Asset Partners (LTAP) before it moves forward with recommending a potential deal to its shareholders, Graham Bradley, chairman of GrainCorp, noted in a Dec. 19 letter to shareholders.
GrainCorp earlier this month said it was in the midst of reviewing a potential takeover bid from LTAP that included an acquisition via a scheme of arrangement, of 100% of the shares in GrainCorp for cash consideration of A$10.42 per share. LTAP is an asset manager for a trust whose beneficiaries are Australian investors.
“GrainCorp is providing LTAP due diligence under the terms of confidentiality to enable LTAP to determine whether LTAP and its financiers can put forward a more certain proposal,” Bradley noted in the letter. “The LTAP proposal at this stage is not sufficiently certain or in a form which would allow the board to make a recommendation to shareholders.”
Bradley said GrainCorp’s board’s focus is on maximizing value for all shareholders.
“We will consider the merits of any final LTAP proposal carefully to determine whether it is in the best interests of shareholders,” he said. “Accordingly, we are seeking additional information from LTAP on its longer-term financing plan and intentions.”
Bradley cautioned that there is no guarantee that GrainCorp’s engagement with LTAP will result in a binding proposal for GrainCorp, what the terms of any such proposal would be, or whether it would be recommended by the company’s board.
Additionally, Bradley noted that the proposal on the table from LTAP is just one of several potential strategic initiatives under evaluation as part of GrainCorp’s ongoing review of its assets.
“This review is considering a wide range of potential value creation strategies, including options for maximizing the value of our malting, bulk liquid storage and our grains storage and logistics assets,” he said. “GrainCorp has a portfolio of high-quality assets and businesses and our review has highlighted that these are clearly of interest in Australia and abroad. It is the board’s intention to give detailed consideration to the full range of opportunities open to us, so we can advise shareholders on the best way forward.”
Bradley said GrainCorp expects to share the results of its review at or before the company’s annual general meeting scheduled for Feb. 20, 2019.