SYDNEY, April 26 (Reuters) - GrainCorp Ltd agreed on Friday to a revised A$3.0 billion ($3.1 billion) bid from U.S.-based Archer Daniels Midland Co, ceding control of Australia's largest independent grains handler after a six-month courtship.
The revised offer included GrainCorp dividends totalling A$1 per share on top of the A$12.20 cash offer, winning over the GrainCorp board which rejected a cash bid at the same level in December.
ADM has been pursuing the Australian grains handler since October, another step in the dramatic consolidation in the global grains sector amid intense competition to feed fast-developing countries seeking food security.
Jordan Rodgers, an equities analyst at Commonwealth Bank of Australia, said the A$13.20 price, including dividends, was in line with his expectation of A$13.15.
'You saw the share price slipping away a week or two ago on the risk that a higher offer wouldn't come through. I don't think this offer will disappoint,' Rodgers said.
GrainCorp shares jumped 8 percent to $12.85 when trading resumed on Friday, a record high.
ADM -- one of the four 'ABCD' firms that have dominated the global agricultural business for decades -- is more U.S.-focused than rivals Cargill, Bunge and Louis Dreyfus.
The U.S. giant is attracted to GrainCorp's dominant position on Australia's east coast and the country's access to Asian markets.
GrainCorp operates seven of the eight bulk grain elevators in eastern Australia, handling as much as 60 percent of the region's wheat, barley, canola, chickpea and sorghum crops.
Illinois-based company ADM currently holds a 19.9 percent stake in GrainCorp.
GrainCorp rejected ADM's first two offers last year after a bumper harvest delivered a record A$205 million net profit for 2012.
The company was at the peak of its earnings cycle but subsequently said it expected to receive only 10-11 million tonnes of grains from farmers this year -- down from 12.2 million tonnes last year and 14.9 million tonnes in 2011.
'The GrainCorp Board believes that the ADM offer highlights the strategic value of our business and unique assets, the program of strategic initiatives being undertaken and GrainCorp's enviable proximity to the fast growing Asian markets,' GrainCorp Chairman Don Taylor said in a statement on Friday.
Chicago Board of Trade wheat futures have slid around 20 percent since ADM made its first approach as expectations of a near-record 2013/14 global crop have weighed on prices.
The deal is subject to regulatory approvals from Australia's Foreign Investment Review Board (FIRB) and China's Ministry of Commerce.
GrainCorp has granted ADM a week to complete due diligence.
($1 = 0.9697 Australian dollars)
(Reporting by Lincoln Feast, Jane Wardell and Colin Packham; Editing by Richard Pullin) Keywords: GRAINCORP ADM/DEAL
(Lincoln.Feast@thomsonreuters.com)(+61 2 9373 1826)(Reuters Messaging: email@example.com)
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