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GNC - GRAINCORP LIMITED


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Looks like Viterra bid by Glencore is going ahead now.

http://www.bloomberg.com/news/2012-03-20/g...billion-1-.html

 

"Glencore International Plc (GLEN), the largest publicly traded commodity supplier, agreed to buyViterra (VT) Inc. for C$6.1 billion ($6.15 billion) to add grain assets in Canada and Australia as growth in Asia boosts demand.

 

Glencore will pay C$16.25 a share, it said in a statement yesterday. Glencore agreed to the deal in partnership withAgrium Inc. (AGU) and Richardson International Ltd., who will buy the majority of ViterraÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Canadian and other assets for about C$2.6 billion in cash, according to the statement.

Viterra dropped 0.4 percent to C$15.91 at the close yesterday in Toronto. Glencore fell 1.6 percent to 413.8 pence in London. The deal values Viterra at 14 times earnings before interest and tax, compared with the median of 16 times for 10 comparable deals since 2002, according to data compiled by Bloomberg"

 

 

Gives an interesting comparison of what might be offered for GNC in the event of a takeover. 14 times EBIT would value GNC at $18.50. No wonder our ag companies are slowly disappearing.

 

 

 

 

 

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RBS Morgan is a bit more downbeat about the takeover valuation for GNC.

They use a lower EBIT forecast than this year ie for an average season to give a valuation of $13.94 in a takeover. Then they decrease this again because of Graincorp being a smaller company to $11.11. Personally sounds a bit pessimistic to me.

I'll be hanging onto mine for another year with this season shaping up to be a good year again with the possibility of another special dividend and the threat of a takeover hanging over it. Chance of the $A easing wont hurt either.

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Have added Graincorp to the port today.

With the continued poor summer grain yields in the northern hemisphere,

and prospects of good yields at least in the eastern seaboard (hoping that South western corner of WA get a boost of rain this weekend), the ducks seem to be lining up for AUS grain producers.

 

Mick

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go for it FF. In discussions with my broker, we decided that a 30% profit in two months is pretty good, so took 12.50 for the lot.

Now that the gloves are off, it may take a year or so before things sort themselves out and I am still nervous about the market.

A lot can happen in a year.

Do you have figure that would cause you to take the money and run??

 

Mick

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No set figure, but am inclined to wait a little while to see if any other offers emerge, or if Graincorp can negotiate a better price.

 

Have a parcel I only picked up recently when the price dropped with the capital raising, plus the rights shares, which I'm thinking pretty hard about letting go at this price. At this point my greed outweighs my fear.

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