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UPDATE 2-Australia's CBH rejects listing proposal, but to review structure

* CBH rejects offer from Australian Grains Consortium

* CBH says has received expressions of interest from others

* Cooperative to talk to shareholders about structure change (Adds comment from rejected consortium, quotes from analysts and shareholders on future of CBH)

SYDNEY, March 14 (Reuters) - Australia’s largest wheat exporter Co-operative Bulk Handling Ltd (CBH) rejected a buyout proposal on Monday, but said it would review its structure and had received other expressions of interest, potentially putting itself in play.

CBH said the plan to acquire and immediately list the co-operative in a deal valued by analysts at up to A$3 billion ($2.2 billion) was not in the best interests of its 4,200 farmer members. It was also deterred by the presence in the purchasing consortium of east coast grain handler GrainCorp.

“This unsolicited bid would see Western Australian grain growers lose control of CBH’s strategic supply chain and GrainCorp acquire a strategic stake in CBH at a discount rather than a premium,” CBH chairman Willy Newman told reporters.

While rejecting the GrainCorp-backed offer, CBH said it had received “several expressions of interest from other parties”. It would talk to shareholders about its future structure and produce a proposal for members by the end of September.

Analysts said the decision suggested Australia’s biggest remaining co-operative - a business structure often favoured in agricultural industries - had acknowledged the call from some shareholders for change.

“CBH has put itself in a position to be acquired and there will be a long line of suitors, though politics may muddy the situation a bit,” said a Melbourne-based analyst, who was not authorised to talk to the media.

Several farmer shareholders in Australia’s largest bulk grain handler told Reuters they were disappointed by the CBH board decision and would seek a change in structure.

“I want to see CBH transition to a commercialized, corporatized entity to give it the extra capacity that it needs to contend with all the new dynamics in the grain market,” said Gary McGill, a grain farmer in Western Australia.

CBH did not name the potential suitors and would not comment on questions about whether the new parties were proposing a deal similar to that proposed by the GrainCorp-backed Australian Grains Champion (AGC) consortium.

A local media report named U.S.-based CHS Inc, which is owned by producers and co-operatives, as a potential suitor for CBH.

The Western Australian cooperative refused to rule out CHS as an entity that had expressed interest.

AGC, which includes farmers and some former directors of CBH, had proposed to acquire and list the Western Australia state co-operative in a deal backed by GrainCorp and pension fund First State Super.

However, the presence of GrainCorp in AGC had stirred concerns among some farmers that it could eventually acquire CBH.

AGC said it was not surprised by CBH’s rejection, but did not comment on its future plans.

“I cannot help but wonder on what basis the non-grower directors, in particular, have satisfied themselves that the Boards’ position is in the best interests of growers,” said Brad Jones, director of AGC in an emailed statement.

Reporting by Colin Packham; Editing by Richard Pullin

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