Rival GrainCorp bid on radar

Gavin Puls harvesting Wheat on his Jung propertyPicture: ANDY ROGERS

GrainCorp could face a rival bid from another suitor, according to a brokers note from UBS.

It comes after a group called Long-Term Asset Partners backed by Lance Hockridge and Tony Shepherd lobbed a $10.42 per share cash bid for the company this month — a bid that values the business at $3.3 billion on an enterprise value basis.

A note from UBS says among other parties that could show interest are the West Australian co-op CBH Group, with an appetite for only the east coast grain assets.

The remainder of the operation could then be placed up for sale.

Archer Daniels Midland could also return to the negotiating table after offering $12.20 per share for the operation in 2013.

However, its offer was rejected by the Foreign Investment Review Board.

Still, UBS’ says that while Treasurer at the time Joe Hockey blocked ADM, he said at then “not saying never, just not now”.

UBS says that with the election here by May, the betting markets suggesting Labor is a very strong favourite to win the election.

Since ADM bid for GrainCorp (GNC) in 2013, new ports have opened up and there is a lot more competition which would make things easier for Labor to let a foreign bidder through, UBS says.

The same CEO at ADM remains in place.

Other possible buyers are the private company Bunge or Cargill, both based in the United States.

Outside possibilities are the agricultural firm Louis Dreyfus or global trader Glencore.