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Graincorp recommends ADM takeover

Graincorp (ASX: GNC) directors have recommended that shareholders accept the lucrative offer from Archer Daniels Midland (NYSE: ADM), which will provide them with a healthy share price and fully franked dividend.

The offer was officially made on 2 May 2013 in an off-market takeover through its wholly owned Australian subsidiary ADM Australia. The deal was to acquire all the shares not already owned by ADM and shareholders who choose to accept the deal will receive $13.20 per share plus a $1.00 dividend.

The dividend will be fully franked, which could provide an additional $0.43 in value per share. The directors say that they have carefully considered the takeover and have advised all shareholders to accept it. At a current price of $12.50, it seems the market may believe there is still an element of uncertainty.

Currently, the Australian agricultural sector is in demand, with many overseas firms looking to take advantage of what could potentially be Australia’s next boom.

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Motley Fool contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.

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