Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

GrainCorp Trades at 33% Premium Sparks Speculation of a Bid

Oct. 19 (Bloomberg) -- Two block trades in GrainCorp Ltd. worth A$536 million ($556 million) at a premium of 33 percent to its previous close sparked speculation of a pending takeover bid for eastern Australia’s largest grain handler.

The two block trades of 22.8 million shares apiece went through at 7:05 a.m. in Sydney at A$11.75 a share. Sydney-based GrainCorp closed yesterday at A$8.85. Angus Trigg, director of government and media relations for GrainCorp, didn’t immediately return two phone messages requesting comment.

Such a trade “certainly would suggest that the company would be in play, particularly at this sort of premium,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone.

GrainCorp, which had a market value of A$2 billion at yesterday’s close, operates seven of the eight ports that ship grain in bulk from Australia’s east coast and has a “virtual, natural monopoly” on the eastern seaboard, according to Justin Crosby, a policy director at the Sydney-based NSW Farmers’ Association, which represents 10,000 members, half of them grain growers.

GrainCorp, which traces its roots to 1916 and the Grain Elevators Board of the New South Wales state agriculture department, handles as much as 60 percent of eastern Australia’s grain crop and has about 20 million metric tons of storage at more than 280 inland grain handling sites, according to the company.

Its revenue has surged since Australia’s 2006 decision to strip AWB Ltd. of an export monopoly, after an inquiry found it was among firms that made illegal payments to win contracts from the former Iraq regime of Saddam Hussein under the United Nations’ oil-for-food program.

To contact the reporters on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net; Lisa Pham in Sydney at lpham14@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.