Assets could go in GrainCorp sale

Andrew Probyn Federal Political Editor CanberraThe West Australian

Pressure is growing inside the Abbott Government for it to demand GrainCorp divest some of its assets as a condition of a $3 billion-plus takeover bid by US company Archer Daniels Midland.

It is understood one proposal inside the Government is for a port - or ports - and some grain silos owned by GrainCorp to be excised from any deal.

WA bulk grain handler CBH is touted as a potential buyer for any assets divested by GrainCorp.

CBH is Australia's biggest grain exporter but does not have a big presence in the east where GrainCorp owns 200 silos and seven of the 10 bulk grain export terminals.

The Port Kembla terminal in NSW is considered one of GrainCorp's best assets and the focus of talks within the coalition about possible divestment to increase competition.

International hedge funds, which stand to make hundreds of millions of dollars from the potential sale, are aware of the Port Kembla divestment talk. In a sign ADM also anticipates a forced divestment, its grain boss Ian Pinner said it was willing to keep its storage sites and ports open for third parties.

Treasurer Joe Hockey has until December 17 to decide whether to approve ADM's $3.4 billion offer.

The Nationals and some rural Liberals are deeply hostile to a takeover and Liberal Bill Heffernan vowed to use a parliamentary hearing on December 2 to demand answers to "critical questions".

But Liberal MPs who support ADM's bid warned last night that any demand for GrainCorp to divest assets might invite further complications if foreign buyers outbid domestic buyers such as CBH.

Shadow minister for trade and investment Penny Wong said Government division between the Liberal and Nationals parties on foreign investment was a concern.

She said the internal battle threatened Australia's capacity to attract vital foreign investment.

Senator Wong said it would be unacceptable if the result had more to do with coalition divisions than the merits of the investment.

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