THE CBH board has voted unanimously today to reject the Australian Grains Champion (AGC) proposal.
CBH said the board had voted to reject “an unsolicited, incomplete and conditional corporatisation proposal that would destroy value for CBH grain grower members and their world-class strategic network”.
CBH chairman Wally Newman said the proposal from AGC lacked transparency, offered no long-term value to WA growers and would deliver a strategic blocking stake in CBH to east coast grain handler and competitor GrainCorp.
“After careful consideration the board has today written to AGC advising that we reject the proposal and will not enter into AGC’s Process Agreement,” Mr Newman said.
“This unsolicited bid would see WA grain growers lose control of CBH’s strategic supply chain and GrainCorp acquire a strategic stake in CBH at a discount rather than a premium.
“We will not enter into an arrangement that does not recognise the investment of generations of WA farmers. This proposal will ultimately result in increased fees and charges for growers and offers no clear plan for the future.”
Mr Newman said the CBH board had provided WA growers with a detailed explanation as to the reasons for its unequivocal decision to reject the proposal.
In summary these detail that the AGC proposal:
* Would result in loss of grower control over CBH’s strategic supply chain
* Destroys value for CBH grower members
* Gives too much power to GrainCorp
* Does not demonstrate a better alternative strategy for CBH or its network
* Does not deliver the best outcome for grower members
In its own statement, Australian Grains Champion has said that it is not surprised the CBH board took this decision.
AGC director Brad Jones said: “At no stage has the CBH Board sought to engage in a discussion about the merits of the proposal and so this was always going to be a disappointing but entirely predictable outcome.”
“Nonetheless I cannot help but wonder on what basis the non-grower directors, in particular, have satisfied themselves that the Boards’ position is in the best interests of growers,” Mr Jones said.
“Growers are very disappointed that the CBH Board is blocking them from seeing a balanced assessment and full details of the proposal.
“At grower meetings in the past few weeks, the overwhelming majority of growers have confirmed they want to see the proposal.
“The response from growers to date has been extremely encouraging and on this basis we will continue to work with the members of CBH to evaluate all options to ensure they, not the board, have the chance to consider the proposal and vote on its merits.”