ADM's AU$2.7B acquisition offer of GrainCorp undervalues company, GrainCorp's board of directors advises

SYDNEY , November 14, 2012 (press release) – On 22 October 2012, GrainCorp Limited (“GrainCorp”) announced it had received an indicative, non-binding proposal (the “Proposal”) from ADM on 19 October 2012 to acquire the outstanding shares in GrainCorp at a price of $11.75 per share in cash. The Proposal was subject to a number of conditions including due diligence, exclusivity and approval by the ADM board.

GrainCorp’s board, together with its advisers, has reviewed and assessed the merits of the Proposal.

GrainCorp is confident in its outlook and strategy to continue to deliver shareholder value, underpinned by its: 

 Integrated business model across the grain supply chain;

 Unique portfolio of grain storage and logistics assets, including the largest infrastructure network of grain storage sites and 7 (of the 8) bulk ports in Eastern Australia;

 Strategic global portfolio of grain processing assets, producing ~35% of Australia’s malt as the world’s fourth-largest commercial malt producer; ~40% of Australia’s canola oil and refined edible oil; and ~35% of Australia’s flour1 as Australia’s leading flour miller;

 Global exposure to attractive industry fundamentals through its assets, which are strategically located to supply regions of demand growth, including the Middle East and Northern Africa and Asia;

 Strong outlook and clear strategy including growth, asset optimisation and cost initiatives to deliver incremental underlying EBITDA of approximately $110 million over the next four years2;

 Track record of delivering against objectives.

Based on the above, the GrainCorp board has determined that the Proposal materially undervalues GrainCorp and has advised ADM accordingly. 

The GrainCorp board remains committed to maximising value for shareholders. 

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