An ACCC Block of GrainCorp’s Bulk Liquid Storage Divestiture Would Negatively Impact our Valuation
The Australian Competition and Consumer Commission’s, or ACCC's, push-back against no-moat GrainCorp’s planned sale of its bulk liquid storage business to ANZ Terminals would reduce our AUD 9.20 fair value estimate by about 6.5%, or AUD 0.60 per share, if the deal ends up not taking place. We noted after the original announcement in March that the divestiture’s price was a good deal for GrainCorp shareholders. The AUD 350 million offer implies a 13 times multiple to the segment’s expected 2019 E...GrainCorp is a food ingredients and agribusiness company. Co. focuses its activities on three main grains (wheat, barley and canola). Co.'s reporting segments are: Storage and Logistics, which include grain receivals, transport, testing, storage of grains and other bulk commodities; Marketing, which markets grain and agricultural products and operates grain pools; Malt, which produces malt products, provides brewing inputs and other malting services, sells farm inputs, and exports malt; and Oils, which includes the processing and crushing of oilseeds. Co. also has a 60.0% joint venture interest in Allied Mills Australia Pty Ltd, a supplier of milled edible flour for human consumption.
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