June 18 (Bloomberg) -- Elders Ltd., an Australian agricultural company, rejected a bid for its rural services unit because it was too low and said it had begun exclusive talks to sell its auto parts business. The stock plunged.
The offer for the Elders Rural Services was “inadequate with respect to value, execution risk and other considerations,” the Adelaide-based company said today in a statement, without saying who made the bid. Ruralco Holdings Ltd. said today in a separate statement it had withdrawn its offer for the business. Ruralco said June 14 it had made a bid for the unit and that there was no certainty of a deal.
Ruralco, which has a 12 percent stake in Elders according to data compiled by Bloomberg, originally proposed a merger with the rural services unit, Elders’s largest, last year. Elders has been looking for buyers for the unit and its automotive business.
The stock slumped 22 percent to 7 Australian cents at the close of Sydney trading. Elders has fallen 39 percent this year, compared with the 3.6 percent gain in the benchmark S&P/ASX 200 Index.
Elders has entered into a short period of exclusive talks with one of three parties that made bids for its Futuris Automotive unit, the company said. It expects the talks to lead to a sale and proceeds from any deal will be used to repay debt, it said.
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