GrainCorp’s Asset Sale Fetches Good Price, but Takeover Bid Remains; FVE to AUD 9.60
No-moat GrainCorp’s plan to sell its Australian bulk liquid storage terminals for AUD 350 million follows management’s stated goals from its annual general meeting to unlock value through portfolio reviews, despite the current nonbinding takeover offer from Long-Term Asset Partners. We think GrainCorp received a solid price for the terminals and have raised our fair value estimate to AUD 9.60 per share from AUD 9.40. Our valuation is the average of AUD 8.80 per share on a stand-alone basis (up f...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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