ADM aims for $3.4B bid for GrainCorp

In Illinois, Archer Daniels Midland Company (NYSE: ADM) announced that it has completed due diligence on GrainCorp Limited (ASX: GNC) and intends to make a cash offer to acquire the outstanding common shares of the company for A$12.20 per share under the terms of the takeover bid implementation deed signed with GrainCorp last week. The offer implies an aggregate transaction value of about A$3.4 billion. The transaction value reflects the weighted average cost of acquiring the initial 19.8 percent stake in GrainCorp at an average of A$11.24 per share, and the remaining shares of GrainCorp at A$12.20 per share. The transaction meets ADM’s key financial objectives, and will be earnings accretive in the first full year. ADM will fund the acquisition through a combination of operating cash flows and debt.

As part of the agreement, GrainCorp will additionally pay to its shareholders, prior to the completion of the transaction, dividends totaling A$1.00 per share. If the regulatory conditions are not achieved by Oct. 1, 2013, GrainCorp will pay an additional dividend of A3.5 cents per share for each full month between Oct. 1, 2013 and the satisfaction or waiver of the regulatory conditions, subject to GrainCorp being profitable over that period.