SYDNEY Dec 9 Australian bulk grain handler
Cooperative Bulk Handling Ltd (CBH), the country's largest
agribusiness, ruled out a share market listing on Friday, ending
the prospect of what would have been the country's largest IPO
in more than two years.
CBH in March rejected an offer from a consortium backed by
GrainCorp Ltd that would have seen the cooperative
bought and then listed in a deal estimated by analysts to be
worth up to A$3 billion ($2.2 billion).
The rejection stirred some discontent from its 4,200 farmer
members, prompting CBH to commit to explore a model similar to
the GrainCorp-backed consortium's proposal if a survey of
farmers backed the move.
But CBH said on Friday the majority of its members wanted to
maintain its cooperative structure.
While an IPO would help members cash in on their equity
stake, many were worried that a change of model would mean
higher charges for using the grain handler's infrastructure.
"The Board has listened and unanimously resolved CBH will
remain a non-distributing cooperative," said CBH chairman Wally
Newman, referring to the group's not-for-profit structure.
CBH dominates grain trading in Western Australia, typically
accounting for nearly half of all annual wheat production in the
world's fourth-largest exporter, and is seen as well placed to
capture growing Asian demand, analysts said.
Wheat from CBH is sold to Indonesia, China and Japan, where
Western Australia supplies are particularly well suited for the
production of udon noodles.
Australia's leading position in markets such as Indonesia,
however, is being challenged by Russia and the Ukraine due to
record global output and low freight costs.
Supporters of change believe CBH would be better placed to
meet such challenges as a listed company, which would help it
raise debt finance to expand and modernise.
"I voted for a change, an IPO. I don't think a
non-distributing cooperative allows for CBH to make changes that
will be needed to be made in the future," John Snooke, a wheat
farmer in Meckering, 130 km east of the state capital of Perth,
($1 = 1.3419 Australian dollars)
(Reporting by Colin Packham; Editing by Richard Pullin)