ADM CLINTON, IA
Nov. 16--DECATUR -- A $2.8 billion offer from Archer Daniels Midland Co. to acquire Australian grain handler GrainCorp was rebuffed Thursday.
After assessing the merits of the plan, the GrainCorp board determined the ADM proposal submitted last month undervalued the company. The company said it has advised ADM accordingly.
The Decatur-based company noted the response it received.
"On Oct. 19, 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," ADM spokeswoman Jackie Anderson said. "We believe it remains an attractive proposal."
ADM had offered to acquire the outstanding shares in GrainCorp at a price of $11.75 per share in cash. A number of conditions were contained in the proposal, including due diligence, exclusivity and approval by the ADM board.
ADM has been interested in purchasing GrainCorp as a way to connect Australian farmers with the Asian and Middle East markets, company Chairman, President and CEO Patricia Woertz said. Australia is a major exporter of many commodities, from minerals such as iron ore to agricultural goods like wheat.
Prior to its bid, ADM had claimed a 14.9 percent stake in GrainCorp, which Woertz said is a common practice in Australia to show a company's commitment.
GrainCorp officials indicated they would be interested in considering any other proposals it found to be in the best interest of the company.