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One of the country's largest agribusinesses GrainCorp (ASX: GNC) has been valued at a 42 per cent premium thanks to a takeover bid from Long-Term Asset Partners (LTAP), which is offering $10.42 per share.
The non-binding, indicative proposal from the Australian outfit values Sydney-based GrainCorp at $2.4 billion, and at the time of writing this morning shares had surged by almost a third.
The GrainCorp board has not yet formed a view on whether to recommend the proposal to shareholders or not, and has appointed Macquarie Capital as its financial adviser and Gilbert + Tobin as legal adviser.
The board said it would engage with LTAP in the context of an ongoing portfolio review to further assess the merits of the proposal.
"This evaluation is ongoing and the proposal is not yet sufficiently certain or in a form which would allow GrainCorp's Directors to make a recommendation to shareholders," the company said.
LTAP, whose directors are Tony Shepherd AO, Lance Hockridge, Andrea Staines and Chris Craddock, has indicated to the GrainCorp board that it does not intend to sell any of GrainCorp's assets should the proposal be supported by the board and shareholders.
"Furthermore, the Board requires additional information on the identity of the equity investors underpinning the LTAP Proposal as well as the longer term financing plan and intentions for the business, to enable a detailed assessment of the impacts of the LTAP Proposal on all of GrainCorp's stakeholders including our shareholders, grower customers, trading partners and our people," GrainCorp said.
The proposal is subject to several conditions and also involves a "complex" financing structure with significant leverage comprising $3.2 billion in acquisition facilities from Goldman Sachs and $400 million from Westbourne Capital.
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