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Category: Grain / Stockmarket

Grain handler CBH offered bid to list on ASX

Wednesday, 17 Feb 2016 15:25:56 | Briana Shepherd

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Western Australia's farmer-owned grain cooperative has been presented with a bid to commercialise and list on the Australian Stock Exchange.

Key points:

  • Grain farmers cooperative offered ASX bid
  • Australian Grain Consortium (AGC) behind CBH bid
  • Bid offers CBH members up to $1 billion cash
  • Board has until March 18 to accept offer

The Australian Grains Champion (AGC) officially presented the Cooperative Bulk Handling organisation (CBH) with its proposal this morning, after months of planning.

The bid by AGC offers CBH members up to $1 billion cash (in two tranches of a guaranteed $600 million of cash plus up to $400 million at the time of listing on the ASX) and shares.

The CBH Board has until March 18 to decide whether it will enter into the process agreement.

After that, AGC has requested the proposal is then put forward to a member vote.

The AGC consortium was formed last year and includes two former CBH directors.

AGC director, and WA grower Clancy Michael said the company was established with the bid for CBH in mind.

"It's not broken at all, CBH has done very well," said Mr Michael, formerly on the board of CBH.

"What we are saying is the structure needs to modernised," he said.

A level road crossing in WA's wheatbelt with seven CBH grain rolling stock carriages on a fine day Photo: CBH train transports grain near Newdegate in Western Australia. (Tara De Landgrafft)

Mr Michael said since the market was deregulated eight years ago the sector had adapted, but that it needed to adapt again.

"If we don't do this now, there's a potential that it might fall away in the future," he said.

"CBH as a group is small by world comparison so we're trying to strengthen that."

There were no changes at the CBH board elections held earlier this week, but the lead up to the election was filled with criticism.

Questions raised included the future of the CBH network, grain competition in the state, and whether or not to keep CBH as a cooperative.

East coast grains giant GrainCorp today announced it would be backing the consortium.

Mr Michael said GrainCorp was joining as investors only.

GrainCorp would have a nominee on the proposed board structure, and along with investment management firm Morrison & Co, would fund the initial $600 million cash payment to CBH growers.

In a media release, CBH said the proposal is complex and highly conditional, so it would take several weeks to assess.

Seventy-five percent of the cooperative's growers would need to vote positively for the bid to go through.

Mr Michael said he was feeling "fairly confident" that the AGC consortium would get the vote and the next month would be spent "information spreading" as part of AGC's campaign.

AustraliaPlus


 

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