AGC not dead yet
Australian Grains Champion is pushing forward with measures to secure grower backing for its billion-dollar CBH corporatisation proposal.
Earlier in the year the CBH board voted unanimously to reject the bid by AGC to corporatise the business, claiming the proposal offered no value to growers.
However the company formed by two former CBH directors and some of WA’s biggest farmers is still pursuing a plan to corporatise the co-operative, with financial backing from GrainCorp and others.
The plan values Australia’s biggest farming co-operative at about $3 billion and promises to deliver grain growers a cash windfall and shares in a new corporate entity controlling storage and handling in WA.
Under the CBH constitution, any offer to buy or corporatise the storage and handling operations would be put to a vote and needs the support of 75 per cent of the 4145 grower members.
This week, in a move to bypass previous resistance to the proposal from the CBH board, AGC sent a blanket letter from directors Brad Jones, Clancy Michael, Sue Middleton, Samantha Tough and John Corbett explaining the “rationale” of the proposal.
AGC have recently wound up a proposal-selling tour throughout the Wheatbelt in an effort to bolster support with CBH members, but it still remains unclear if AGC even has the support of 10 members, which would would be required to trigger an extraordinary general meeting and bring the matter to a head once and for all.
The letter was accompanied by a USB which included a recorded interview with Mr Jones, which the company says will outline the rationale for including GrainCorp as a strategic investor in Australian Grains Champion and how it can help Australian growers fight off Black Sea competition, the future of storage and handling fees and grower control.
In the letter, Mr Jones said there had been a lot of misinformation spread about the proposal so the provided information would act to set out what the AGC entails and to dispel the myths that have been perpetuated about it.
Mr Jones also said in the letter: “CBH were out in the media saying our proposal was not good”.
“Stagnating is not good,” he said. “Selling CBH to a foreign investor is not good. A politicised board is not good. But a proposal which provides Australian funding to invest in CBH, which retains grower control, which gives growers equity and cash, and which strengthens CBH to ward off competition from foreign competitors is good ... and growers be given the right to vote on whether they want that change.”
On Tuesday, Mr Jones also confirmed toCountryman his company had previously engaged polling company Crosby Textor to conduct a survey with about 20 CBH members about their perceptions of the incumbent CBH board and of the AGC proposal.
Lake Grace grower Allan Marshall said he had been contacted to take part in the survey but declined, after CT declined to disclose their client.
Countryman also understands Trayning grower Derek Clauson, who comfortably held his seat as a board member in the 2016 CBH member director elections earlier this year, was also approached to take part in the survey.
Mr Jones said the survey was to gain clarity about political ideologies held by CBH directors.
“The AGC directors voted a unanimous ‘yes’ to our independent polling company Crosby Textor doing the survey,” he said. “And we don’t believe it is was an underhanded approach because we know that more than 50 per cent of members would like to see the proposal.
“The CBH board have failed in delivering on its governance principle of democratic control by attempting to prevent its members from making an informed decision about the proposal for themselves.”
Meanwhile, Merredin grower Ian Lane says he had made up his mind not to support AGC months ago and nothing they could do or say now would change his decision.
“I attended a meeting in Merredin where AGC directors Brad Jones and Sue Middleton where given equal time with CBH management to present the proposal,” he said.
“I was even given plenty of opportunity to have face-to-face discussions with AGC about any specific questions I had.”
“The problem for AGC, as far as I was concerned, was that they were not realistic after saying they expected to get their plan passed by the Australian Competition and Consumer Commission, State Government and Australian Taxation Office in six months.
“GrainCorp only made $38 million last year, so how are they supposed to be coming up with the $300 million alone to back this deal? If you ask me it smacks of American grain giant Archer Daniels waiting in the wings, and this latest move by AGC trying to directly influence CBH members is them desperately trying to find a new angle.”
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