Long-Term Asset Partners’ bold move to purchase GrainCorp

BULK-GRAIN handler GrainCorp is considering a takeover proposal worth an estimated $2.4 billion from Long-Term Asset Partners.

The grain-handling giant received a non-binding proposal at the end of November to acquire the company.

But the GrainCorp board expressed concerns about the long-term financial planning of the business and the identity of investors underpinning the proposal. The bid valued GrainCorp stocks at $10.42 a share, representing a premium of 42.7 per cent to the last closing price of GrainCorp shares of $7.30 on November 30.

LTAP chairman Tony Shepherd said the proposal would ensure stable development of GrainCorp and would guarantee ownership and control remained in Australian hands.

“Under our proposal, GrainCorp shareholders have the opportunity to receive an immediate cash payment at a significant premium and at a price which we believe represents a very attractive value for the company,” Mr Shepherd said.

“Our plans for GrainCorp’s assets are focused on increasing volumes over time.

“There are many aspects of our strategy for the company’s future but increasing volumes is central.

“Increased production volumes are good for farmers and good for GrainCorp.”

“The proposal is subject to a number of conditions,” the GrainCorp board responded, “and involves a complex financing structure with significant leverage comprising $3.2 billion in acquisition facilities from Goldman Sachs and $400 million from Westbourne Capital.”