Forrest investigated CBH opportunities

25 Feb, 2016 01:00 AM
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Minderoo Group managing director Andrew Forrest spend considerable time looking at the CBH business model.
Minderoo Group managing director Andrew Forrest spend considerable time looking at the CBH business model.

DURING his address to the WAFarmers conference last Friday, Minderoo Group managing director Andrew Forrest said he had spent a year looking into the CBH business and what opportunities it could deliver.

"I wondered is there a path to really develop it and give its stakeholders much greater exposure, lessen the margins taken out and give growers a bigger share," Mr Forrest said.

"I looked at it for about a year, before deciding there were other, easier fish to catch."

Mr Forrest said while CBH was a good business, it was not for him.

The discussion over CBH was raised at the conference following growers' concern over the proposal to publicly list CBH, which would see grower-members get up to $1 billion cash in two tranches of a guaranteed $600m of cash plus up to $400m at the time of listing on the ASX.

Mr Forrest said CBH had a heap of potential.

"I was really looking at ways we could make it more profitable and more responsive and get shareholder profits back to farms in WA," he said.

"If it doesn't want to be taken over, then it is up to the leadership to make sure that potential is maximised for current stakeholders, otherwise it will be maximised for the future stakeholders.

"I am not surprised other investors have also had a look."

Federal Shadow Agriculture Minister Joel Fitzgibbon has also weighed into the CBH debate, saying Minister and new Deputy Prime Minister Barnaby Joyce's comments warning government assistance measures may be blocked if CBH shareholders corporatise CBH are "extraordinary".

Mr Joyce was quoted on the weekend cautioning CBH shareholders against accepting the Australian Grains Champion proposal and changing the current co-op structure.

"I tell you, don't come screaming in my door asking me to retrospectively fix the problem after you've collected the money from it," Mr Joyce was quoted as saying.

"Here is my salutary warning: if you turn into a corporatised entity and then sell, don't come back and ask for special treatment.

"Once you have sold, we don't help you any-more; you put the money in your pockets."

But Mr Fitzgibbon said the minister's statements were problematic; especially considering the co-op exemption he granted in the wheat port access code, in this term of government.

"I thought they were extraordinary comments because the only interpretation you could put on them was this, from the Deputy Prime Minister of the country: 'you will choose the corporate structure I prefer or you will get no assistance from this government'," he said.

Mr Fitzgibbon believed CBH shareholders should be left to make their own decisions, in both the interests of the business and their own investment.

"It's not for the Deputy Prime Minister of this country to tell people how to run their business," he said.

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READER COMMENTS

Simon
25/02/2016 8:50:42 AM, on Farm Weekly

It is for the deputy prime minister to be concerned about critical national infrastructure like CBH's grain handling system falling into multinational hands, Joel.

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