May 19, 2008

Graincorp offers takeover for Ridley

Australian grain handler Graincorp Ltd has offered to buy Victoria-based livestock feed maker Ridley Corp for US$415 million.

Ridley chairman Dr John Keniry said the offer is an "unsolicited, conditional takeover by Graincorp and he is urging shareholders "to take no action until the offer is reviewed in detail by the board".

Graincorp is offering one of its shares for every nine Ridley shares, representing an implied offer price of US$1.39 per Ridley share, based on Graincorp's closing price of US$12.48 on May 15.

Jason Teh, fund manager at Investors Mutual Ltd, which holds Graincorp's shares said there will be potential synergies across both companies and the combined group will make strong business.

Shares in Ridley, one of Australia's biggest feed maker site, rose as much as 11.5 per cent after the announcement, but later pared gains to stand 6.9 percent higher at US$1.39 by 1452 AEST, suggesting investors were not expecting a higher bid.