GrainCorp more interested in unlocking AU$110M of annual profit improvements it has identified than being acquired, CEO says after company rejects AU$2.68B takeover proposal from ADM

Nevin Barich

MELBOURNE, Australia , November 18, 2012 (Australian Associated Press) – Eastern Australia's largest grains handler, GrainCorp, says it is more interested in unlocking $110 million of annual profit improvements it has identified than being acquired.

The grains marketer and maltster rejected a $2.68 billion takeover proposal from US-based food processing giant Archer Daniels Midland Company (ADM) on Friday.

It reported a 19 per cent lift in annual profit to $204.9 million on the same day.

Chief executive Alison Watkins said she believed the company's profit result and plans to lift annual earnings would give shareholders an understanding of GrainCorp's fundamental value, which was greater than ADM's $11.75 a share cash offer.

"We're not in the mode of selling the company," she told ABC TV's Inside Business on Sunday.

"We considered the ADM proposal. We took that very seriously. We have a great growth strategy, very excited about getting on and delivering that."

Ms Watkins cited the recent $472 million acquisition of Goodman Fielder's Gardner Smith and Integro food oils businesses as growth drivers.

GrainCorp would be more focused on organic growth - rather than bolt-on acquisitions - through its existing east Australian assets involving wheat, barley, canola and storing, processing and marketing those grains, she said.

New York stock exchange-listed agribusiness giant ADM is the world's largest corn producer and increased its stake in GrainCorp to 14.9 per cent from 4.9 per cent last month.

The possible foreign control of a major Australian wheat exporter led NSW Nationals Senator John Williams to argue against its approval, which would have to be given by the Foreign Investment Review Board.

AAP gr/evt/pm

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