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Australia's GrainCorp gets A$2.38 billion buyout offer

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By Reuters
Australia's GrainCorp gets A$2.38 billion buyout offer

(Reuters) – Australia’s drought-hit bulk grain handler GrainCorp Ltd <GNC.AX> received an all-cash A$2.38 billion (£1.3 billion) buyout proposal from Long-Term Asset Partners Pty (LTAP), the company said in a statement on Monday.

The company’s produce has withered under extreme drought conditions in the country this year, which heavily weighed on results and forced Australia’s largest listed bulk grain handler to slash jobs – making it potential takeover fodder.

The offer of A$10.42 per share comes at a premium of about 43 percent to GrainCorp’s closing price on Friday.

GrainCorp’s board said it would engage with LTAP with regard to an ongoing portfolio review of the company and also assess merits of the proposal.

The company also noted the “complex financing structure” of the deal involving A$3.2 billion in acquisition facilities from Goldman Sachs and A$400 million from Westbourne Capital.

LTAP, an asset manager for a trust whose beneficiaries are Australian investors, said it did not intend to sell the assets of GrainCorp if the offer is backed by GrainCorp’s board and shareholders.

The Australian government blocked a A$2.8 billion takeover of GrainCorp by U.S. agribusiness giant Archer Daniels Midland Co <ADM.N> in 2013 – bowing to pressure from grain growers.

(Reporting by Devika Syamnath in Bengaluru; Editing by Peter Cooney)