ADM bids for Australia's GrainCorp in $2.77B deal
NEW YORK (AP) — Archer Daniels Midland Co. has offered to buy Australian grain handler GrainCorp for about $2.77 billion.
GrainCorp says it is considering the non-binding offer, which values it at 11.75 Australian dollars ($12.13) per share. That comes to 2.68 billion Australian dollars, based on the company's 228.2 million shares outstanding according to data provider FactSet. ADM already owns 14.9 percent of GrainCorp.
Shares of GrainCorp rose 39 percent in Australia Monday to close at 12.30 Australian dollars after it disclosed the bid from ADM. The closing price suggests that traders expect a higher bid.
ADM, an agribusiness conglomerate, says it looks forward to continuing to discuss the deal with GrainCorp directly. The Decatur, Ill., company's shares fell 48 cents, or 1.7 percent, to close at $28.04 Monday.
Archer Daniels Midland has said that it wants to invest in overseas suppliers.
Australia is a major exporter of many commodities, from minerals such as iron ore to agricultural goods like wheat.
ADM's revenue rose 10 percent to $89 billion in its latest fiscal year, which ended in June. But the company has warned that its operations will be hurt because a severe U.S. drought this year shrank harvests and pushed up grain prices.