Firm advises on proposed grain mega deal

One firm has advised CBH on its response to a $1bn proposal by Australian Grains Champion.

King & Wood Mallesons has advised CBH Group on its rejection of Australian Grains Champion’s unsolicited corporatisation and listing proposal.

CBH Group is Australia’s largest grain exporter, the only wholly Australian owned business of its type.

“For WA grain growers it means they retain control of their critical Western Australian storage and handling infrastructure network,” said lead partner on the deal Heath Lewis.

“We are pleased to have been able to once again work closely with the CBH board and executive team in advising them on their response AGC’s proposal.”

The proposal by GrainCorp-backed Australian Grains Champion included up to $1bn in cash and scrip being offered to Western Australian grain growers in return for corporatizing and listing the CBH business on the ASX.

But the CBH board announced its unanimous rejection of the proposal this week.

“CBH’s storage & handling, rail and port network consistently gets tonnes to market at lower charges to grain growers than in other Australian jurisdictions,” Lewis said.

“In farming businesses where margins are often thin, every dollar per tonne of cost saved is significant.”

Lewis said the proposed transaction was unusual, given the current environment.

“De-mutualisation-style transactions tend towards complexity at the best of times, having numerous features that a standard ASX-listed scheme or takeover does not,” he said.

Gilbert + Tobin advised GrainCorp.

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