Tim Wimborne/Reuters
A wheat field near Chinchilla, Australia.
HONG KONG – The Australian grain trader GrainCorp rejected a takeover bid on Thursday from the Archer Daniels Midland Company that valued GrainCorp at 2.7 billion Australian dollars.
GrainCorp’s board said A.D.M.’s cash bid of 11.75 Australian dollars a share “materially undervalues GrainCorp,” citing the company’s strong position in the Australian market and plans to increase profitability.
Shareholders appeared to agree. Since A.D.M.’s bid for GrainCorp, worth about $2.8 billion, was announced last month, GrainCorp’s shares have traded consistently above the offer price, suggesting investors either expect a rival bid or an improved offer from A.D.M.
Shares in GrainCorp rose 0.2 percent, to close at 12.20 dollars on Thursday, after the board rejected the offer.
“We approached GrainCorp’s board with a proposal that represented a significant premium to the prevailing GrainCorp share price at the time of our approach,” Jackie Anderson, a representative for A.D.M., said on Thursday in a statement after GrainCorp’s rejection. “We believe it remains an attractive proposal.”
Credit Suisse and Greenhill are acting as financial advisers to GrainCorp.