Australian Rejects GrainCorp Takeover by ADM

Marcus Jacob
29 Nov, 2013
New York City

Resource stocks led market indexes in Australia lower. Australian government rejected a takeover offer for GrainCorp and said foreign investment in the sector is not in its best interest. Credit growth in private sector increased 0.3% in October.

[R]4:30 PM Sydney – Resource stocks led market indexes in Australia lower. Australian government rejected a takeover offer for GrainCorp and said foreign investment in the sector is not in its best interest. Credit growth in private sector increased 0.3% in October.[/R]

Stocks in Sydney closed lower and Australian government rejected GrainCorp takeover offer and Rio Tinto said its iron expansion will cost less than half of US$5 billion estimate.

The Reserve Bank of Australia reported credit growth in the private sector rose 0.3% in October matching the growth in September and August.

On annual basis, credit growth increased to 3.5% from 3.3% in the year to September. Housing credit increased 0.5% in October and 5% from the year to September.

Australian dollar traded at 91.91 U.S. cents. In stock trading, turnover edged up to 735 million shares worth $5.6 billion.

The ASX 200 index decreased 14.30 or 0.3% to close at 5,320 and the broader All Ordinaries fell 12.30 to 5,314.30.

For the week, ASX 200 slid 0.3% and for the month dropped 1.8%.

Stocks in Review

Rio Tinto jumped $1.64 to $66.06 and the miner said it plans to suspend alumina production at Gove and focus on bauxite operations and said the refinery is no longer a viable business in Western Australia.

The iron ore mining company also estimated its ore mining expansion to 360 million tons at less than half the earlier estimate of US$5 billion.

BHP gained 20 cents to $37.39 the explorer signed five-year extension contract with energy ministry of Trinidad for exploring oil at a block with Chaoyang Petroleum from April 21, 2021 to 2026 and plans to invest $400 million.

Woodside Petroleum Limited fell 9 cents to $38.15.

Westpac jumped 23 cents to $33.

GrainCorp Ltd tumbled 22.1 to $8.72 after the Australian government rejected $3.4 billion takeover offer from Archer Daniels Midland Co.

Treasurer Joe Hockey concluded in a statement that it is not the right time for a foreign company to acquire full-ownership of an Australian grain business and requested ""no conditions or undertakings"" from ADM.

Chairman Don Taylor says the Federal Treasurer’s decision to block the foreign takeover of the company is “extremely disappointing.”

Lynas Corporation Limited closed unchanged at 30 cents and 24.6% of shareholders voted against company executives’ remuneration plan at annual general meeting today.