GrainCorp has opened its books to Long-Term Asset Partners (LTAP) and told the takeover bidder to put together a better and more certain offer.
LTAP made waves earlier this month when it offered to buy 100 per cent of the ASX-listed grain handler via an all-cash deal worth $2.38 billion, or $10.42 per share.
To fund the move, LTAP, chaired Tony Shepherd and deputy chaired by former Aurizon boss Lance Hockridge, has secured a $3.2 billion acquisition facility from Goldman Sachs, and $400 million from Westbourne Capital.
But GrainCorp, speaking to the market for the first time since the bid was received on December 3, said this week LTAP still needs to prove it can table a more certain proposal.
“The LTAP proposal at this stage is not sufficiently certain or in a form which would allow the board to make a recommendation to shareholders,” GrainCorp chairman Graham Bradley wrote on December 19.
“At this stage, there is no certainty that our engagement with LTAP will result in a binding proposal for GrainCorp, what the terms of any such proposal would be, or whether it would be recommended by the GrainCorp Board.”
Bradley said GrainCorp is providing LTAP due diligence under the terms of confidentiality, to provide it the opportunity to make a renewed offer.
But he reiterated GrainCorp’s initial response to the bid, saying it would be taken as just one of several potential strategic initiatives on the table as part of GrainCorp’s ongoing review of its portfolio of assets.
“The review is considering a wide range of potential value creation strategies, including options for maximising the value of our malting, bulk liquid storage and our grains storage and logistics assets,” Bradley wrote.
“GrainCorp has a portfolio of high-quality assets and businesses and our review has highlighted that these are clearly of interest in Australia and abroad.
“It is the board’s intention to give detailed consideration to the full range of opportunities open to us, so we can advise shareholders on the best way forward.”
Bradley said the GrainCorp board would share the results of its full review on February 20, 2019.