June 11, 2008
Ridley rejects takeover offer from GrainCorp
Compound feed manufacturer, Ridley Corporation, said it refused GrainCorp's takeover offer.
GrainCorp's offer in a share exchange valued Ridley's shares at AUD1.39 when it was made on May 16, or at AUD1.25 last Thursday just before the Bidder's Statement was lodged.
Ridley's major shareholder, Investors Mutual, has already made an agreement with GrainCorp that it would deliver 19 percent of Ridley shares.
John Keniry, Ridley chairman, said the company could offer shareholders better value.
Keniry added that the offer undervalued Ridley shares and would expose shareholders to the vagaries of fluctuating wheat harvests, which had recently been affected by drought.
Furthermore, Ridley had also decided to sell its North American interests and discovered surplus land worth about AUD80 million, which would be valued at 27 cents a share.
In the Bidder's Statement, GrainCorp chairman Don Taylor said the offer for Ridley was consistent with GrainCorp's vision to be Australia's leading handler and supplier of agriproducts and bulk products.
GrainCorp said that a merged entity would have a market capitalisation of more than US$1 billion.
US$1 = AUD1.06 as of June 11, 2008