CBH chief executive Andy Crane says his board's decision to reject a GrainCorp-backed corporate bid from Australian Grains Champion (AGC) earlier in the year has not changed in light of Archer Daniels Midland's (ADM) failed attempt to sell its 20 per cent stake in GrainCorp last week.
Speaking at the Australian Grains Industry Conference in Melbourne last week Dr Crane said the news was not a factor.
"We were against the proposal beforehand and nothing has changed," said the boss of the WA-based co-operative.
GrainCorp managing director Mark Palmquist had earlier said that despite the uncertainty created by ADM's attempts to off-load its 19.9 per cent share in the business, the proposal to fund $300 million for the AGC bid to corporatise CBH was not necessarily off the table.
However, Dr Crane said the news was unsettling for GrainCorp.
"They look to be having problems of their own, and perhaps they should focus on the east coast rather than looking here, where the overwhelming number of growers support CBH's current co-operative structure."
His verdict was backed by the stock market, where GrainCorp shares slid 5.6 per cent to $8.15 from Tuesday to Wednesday last week on the back of the news.
Dr Crane said CBH undertook research on its structure in the wake of the AGC bid which found 78pc of its grower members support the current set-up of the business.
He said opposition to the proposal was not based on issues surrounding foreign ownership, but simply the deal presented by AGC.
"We don't need GrainCorp full stop, we don't want anyone else running our supply chain in WA.
"The numbers are there, we have a lower cost supply chain than the east coast, so why would the growers want to change it?"
Mr Palmquist disagreed, saying the AGC proposal would unlock value for WA grower shareholders of CBH.
But Dr Crane said the board's decision not to take the AGC proposal to a vote had overwhelmingly been supported by the WA grower community.
The comments come as financial services firm Patersons Securities released research showing that CBH would have a stock market value of at least $2.56 billion.
The research named CBH's storage and handling division as the most important part of the business, with its flour milling, barley malting and oats manufacturing facilities also mentioned in the research note.
"The business exhibits properties of being highly cash-generative, with lots of upside if it can encourage more usage of its storage and handling infrastructure," the report said.
"AGC is offering growers a total of $600m in cash, plus a portion of the shares in the listed entity, the value to be determined by the share price of the listed company, the number of co-perative shares owned and the average proportion of the total harvest handled by CBH over the past five years.
"Based on our valuation, the CBH corporatisation plan proposed by AGC is estimated to result in the average grower receiving around $131,000 of cash and about $430,000 worth of shares in the ASX-listed company.
"The calculations are based on an average grower owning one co-operative share and delivering 2500 tonnes per annum to CBH over the past five years.
"We see this as a potential boost to the WA economy, through an injection of financial liquidity into the Wheatbelt region," the report said.
"It should stimulate farm rationalisation and higher crop yields, which should enhance the profitability of CBH and hence grow the value of its shares."
ACG put forward a deal earlier this year which offers growers $600m in cash plus a portion of shares, which was rejected by the CBH board.
AGC director Brad Jones said the valuation by Patersons Securities gave WA grain growers even more reason to consider the AGC proposal.
"The valuation indicates at least $560,000 of value could be unlocked for the average grower if the Australian Grains Champion Proposal is successful," Mr Jones said.
"Growers would also hold a significant ownership interest in the company and enjoy a cap on storage and handling fees.
"That is a significant amount of money that could fund investment in farm expansion, productivity upgrades, retiring net debt or generational change."
Mr Jones called on the CBH Board to allow AGC to conduct due diligence so its proposal could be subjected to an independent experts report and a vote of growers whether to accept the proposal.
