(Corrects to remove quote marks in paragraph 4 and clarify
holdings are with DWS and other units)
MELBOURNE Oct 24 Deutsche Bank has
built a 5.2 percent stake in Australian takeover target
GrainCorp in recent months, a move that could pay off
handsomely as the target's shares have soared and could climb
even higher if rival bids appear.
U.S. agriculture giant Archer Daniels Midland bid
$2.8 billion for GrainCorp this week, sending shares in
Australia's last remaining independent grains handler soaring to
Australian Stock Exchange filings show Deutsche Bank
acquired a 5.2 percent stake in GrainCorp through a range of
funds and units since June, suggesting the purchases were for
investment for clients rather than on behalf of a rival bidder.
The majority of the new holdings are on behalf of Deutsche's
asset management units including DWS, a filing added.
Deutsche Bank declined to comment further on the
Many analysts have argued the Archer Daniels' bid, even at a
33 percent premium to its pre-offer price, undervalues GrainCorp
based on past deals and expect either a sweetened offer from ADM
or another suitor to emerge.
U.S. industry bankers told Reuters that Bunge and
Cargill were no doubt evaluating rival bids.
"It wouldn't surprise me to see Cargill take a good hard
look along with Bunge, to see if the economics of the
acquisition of GrainCorp work, the company is in play," said a
banker who asked not to be identified because he was not
authorized to speak with the media.
"There have been a number of consolidations in the
(agricultural) sector and ADM hasn't participated," the banker
said. "I think they're determined to win this and obviously
they've taken a very aggressive approach here."
Cargill and Bunge declined to comment on whether they had
any interest in GrainCorp.
"It's still in play. Anything's possible," said Paul
Xiradis, chief executive at fund manager Ausbil Dexia, which
owns shares in the Australian grains group.
GLOBAL GRAINS CONSOLIDATION
ADM's bid comes at a time of consolidation in the global
grains sector as fast-developing countries seek food security.
Australia is a coveted market with a stable policy regime
and good links to Asia. After a string of deals, GrainCorp is
the last available asset, which can give full access to the
world's second-biggest wheat exporter. Cargill and GrainCorp
have a joint venture in their ownership of Allied Mills, a flour
producer in Australia.
GrainCorp has said it was reviewing the offer by ADM, which
has a 14.9 percent stake in the firm now.
GrainCorp operates seven of the eight bulk grain elevators
in eastern Australia, handling as much as 60 percent of the
region's wheat, barley, canola, chickpea and sorghum crops.
Credit Suisse and Greenhill are advising
Aside from Cargill and Bunge, analysts have named potential
rival bidders including China's Bright Foods, Singapore's Wilmar
and commodities trader Louis Dreyfus.
GrainCorp shares, which are in a trading halt, last traded
at A$12.17, compared with the A$11.75 a share bid from ADM.
(Reporting by Miranda Maxwell in Melbourne and Soyoung Kim in
New York; Editing by Muralikumar Anantharaman)