Bloomberg News

GrainCorp Plans to Pay Dividend as ADM Deal Nears Completion

November 13, 2013

GrainCorp Ltd. (GNC), the Australian crop handler that agreed to be bought for A$2.2 billion ($2.1 billion) by Archer-Daniels-Midland Co. (ADM:US), expects to pay a 55 cent dividend before the deal becomes unconditional.

Shareholders will receive a dividend of 20 cents a share next month bringing the full-year payout so far to 45 cents and a further payment is expected to “be declared and announced by the GrainCorp board shortly before the ADM offer becomes unconditional,” the Sydney-based company said today when reporting a 31 percent drop in annual earnings. Under the terms of the deal, a total of A$1 in dividends can be paid.

ADM is seeking to conclude a deal to acquire GrainCorp for A$12.20 a share in the first three months of 2014. The transaction is subject to approval from Australia’s Foreign Investment Review Board and China’s Ministry of Commerce as it will give ADM control over seven of the eight ports that ship grain in bulk from the Pacific nation’s east coast.

Australia, the world’s third-largest shipper of wheat and beef, and the largest wool exporter, would lose out under the sale by relinquishing control of its food security, Deputy Prime Minister Warren Truss said Nov. 3.

GrainCorp was little changed at A$12.22 at 10:05 a.m. in Sydney.

Treasurer Joe Hockey, who will make a decision on approving the deal by Dec. 17, said this month he wouldn’t be pressured by opposition to a foreign acquisition of GrainCorp.

Net income fell 31 percent to A$140.9 million in the 12 months to Sept. 30, from A$205 million a year ago, missing a A$159.4 million median estimate of five analysts surveyed by Bloomberg. Earnings fell as receivals declined on lower grain production in eastern Australia and as a result of costs of A$18 million responding to Decatur, Illinois-based ADM’s proposal, GrainCorp said.

To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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