AUSTRALIAN Grains Champion (AGC) has formally withdrawn its proposal to commercialise the CBH group, announcing its decision to pull the $600million cash plus shares deal on Monday.
"It was a good proposal, was properly funded, and it could have provided substantial benefits to Western Australian growers," the announcement said.
"This decision to withdraw was difficult and made reluctantly, however we feel it is appropriate in the light of CBH's ongoing complex and long-winded structure and governance review.
"The decision will give all of us the time, space and opportunity to focus squarely on the CBH board process and the forthcoming harvest.
"Unfortunately the CBH board denied growers the ability to view the Australian Grains Champion proposal in full and a chance to exercise their right to vote on a proposal that could have injected $2.56 billion onto farm balance sheets and into the WA rural economy."
The withdrawal of the proposal also brings an end to the agreement between AGC and its backer, GrainCorp, who were bankrolling the proposal with consortium partners.
GrainCorp managing director and chief executive officer Mark Palmquist said any decision on AGC's proposal should be one for WA grain growers.
"While we believe the proposal designed by AGC was unique and attractive, CBH is conducting its own review of its structure and governance, which will take some time to finalise," Mr Palmquist said.
"At the same time, WA growers are working to ensure their farm businesses are prepared for what is shaping up to be an historically large harvest.
"In this light, it is appropriate to afford WA growers time and space to address these other important priorities for their businesses.
AGC grower director Brad Jones said the AGC proposal had already achieved a number of benefits for WA grain growers.
"AGC was able to attract an initial $600 million of potential investment into Western Australian agriculture, a $600 million injection into rural WA that could have occurred almost immediately if WA grain growers had been able to vote for our proposal," he said.
"We have saved growers $400 million in network rationalisation charges by forcing CBH to reduce its planned gold plating of the storage and handling network from a proposed $1.15 billion to $750 million, and we have forced CBH to review its structure and governance."
Mr Jones said the feedback from most growers was they wanted the CBH structural review process to reach its natural conclusion and that they were focused on the approaching harvest.
He said as a grower-led movement Australian Grains Champion respected that feedback.
"If CBH fails to meet growers' expectations, and there is a groundswell of growers prepared to fight for change, Australian Grains Champion may review its current position," Mr Jones said.
CBH Chairman Wally Newman said growers had wholeheartedly supported the board's decision to reject the AGC offer back in March.
"The board was unanimous in its view that the proposal did not represent value for WA grain growers and it would have delivered a strategic blocking stake in CBH to east coast grain handler and competitor GrainCorp," he said.
Mr Newman said results from an online and telephone grower survey conducted in April, following CBH's rejection of the AGC proposal in March, showed 78 per cent of grower members supported the board's decision to reject the AGC offer.
He said the co-operative was currently surveying its members to gauge the preferences of growers on a number of structure and governance options, which include shifting from its current non-distributing structure towards a distributing co-operative or publicly listed entity.
"We are currently working in close consultation with our members, undertaking a structure and governance review and implementing a number of strategic programs.
"This is central to the way we run our business, informing and focusing on growers, and ensuring we understand what is important to them," Mr Newman said.
Pastoralists and Graziers Association graingrowers committee chairman Gary McGill said it was a "disgrace and a tragedy" that the AGC proposal was not voted on by growers when it was first put to the CBH board.
"The AGC proposal, in our view was a formidable, sound and well constructed proposal and it is tragedy that a philosophy held by parts of the CBH board and the grain growing sector means growers were disallowed to vote on the proposal in full," Mr McGill said.
"The AGC proposal had all the details for growers, all the values and also had additional information from Paterson Security whereas the farce of an exercise CBH are now running with their surveys and meetings are nothing more than a way for them to keep the status quo."
WAFarmers was contacted for comment but did not respond in time for publication.
