After Australian treasurer Joe Hockey rejected Archer Daniels Midland’s (ADM) $3.4 billion takeover bid for GrainCorp., many believe that the next target of foreign investors could be CBH Group – Western Australia’s largest grain handler and the country’s second largest wheat exporter. Corporatization of the 80 year old co-op could unlock an estimated $5 billion in value for its 4,000 grower-members. As competition increases in the sector, many in the industry believe that in order for CBH to remain competitive, corporatization is necessary in order to commercially focus its operations and avail itself of equity and debt markets to fund growth. CBH has assets worth approximately $1.5 billion including a major international storage and processing network, and estimates are that the co-op would be worth 1.5 times GrainCorp’s market value, or $5 billion. Any movement toward corporatization would require the support of 75% of CBH’s grower-members. In 2000 just under 60% voted in favor of such an action.
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