GrainCorp just got a $2.4 billion takeover offer

Michele Mossop / Getty ImagesWheat harvest In NSW
  • GrainCorp received a $10.42 a share takeover offer.
  • The deal is valued at $2.38 billion.
  • The bid has been made by Long-Term Asset Partners, a new asset manager.

Bulk grain handler GrainCorp is under a $2.38 billion takeover offer from Long-Term Asset Partners, a group including businessman Tony Shepherd, a former president of the Business Council of Australia and chair of Transfield.

The offer, via a scheme of arrangement, is pitched at $10.42 a share. They closed on Friday at $7.30 and jumped 30% to $9.5 on opening Monday.

Long-Term Asset Partners, whose directors are Shepherd, Lance Hockridge, Andrea Staines and Chris Craddock, says it is an asset manager for a trust whose beneficiaries are Australian investors.

The group is a new entity and GrainCorp would be its initial investment.

The board of GrainCorp says the proposal is subject to a number of conditions and involves a complex financing structure with significant leverage made up of $3.2 billion in acquisition facilities from Goldman Sachs and $400 million from Westbourne Capital.

“There is no certainty that the proposal will result in a binding proposal for GrainCorp, what the terms of any such proposal would be, or whether it will be recommended by the GrainCorp Board,” the board says.

GrainCorp has appointed Macquarie Capital as financial adviser and Gilbert + Tobin as legal adviser.

In its latest annual results, GrainCorp reported a 43.7% drop in after tax profit to $70.5 million. Revenue was down 7% to $4.25 billion.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.