CBH chief executive Andy Crane says his board’s decision to reject a GrainCorp-backed takeover bid from Australian Grain Champions (AGC) earlier in the year has not changed in light of ADM’s failed attempt to sell its 20pc stake in GrainCorp this week.
Speaking at this week’s Australian Grains Industry Conference, Dr Crane said the news was not a factor.
“We were against the proposal beforehand and nothing has changed now,” the boss of the WA-based co-operative said.
GrainCorp managing director Mark Palmquist had earlier said that despite the uncertainty created by ADM’s attempts to off-load its 19.9pc share in the business the proposal to fund $300 million for the AGC bid to takeover 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 from Tuesday to Wednesday on the back of the news to $8.15.
It is a bitter pill to swallow for GrainCorp, which is finally looking at a strong year across its storage and handling division after two years of drought impacted grain receivals.
Dr Crane said CBH undertook research on its structure in the wake of the CBH 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, simply around the deal presented by the AGC proposal.
“We don’t need GrainCorp full stop, we don’t want anyone else running our supply chain in Western Australia.”
“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.
However, 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.