Today’s release of CBH’s structure and governance information booklet is notable not by its content but by a glaring omission – its failure to include the only fully-formed proposal with $600 million cash plus shares for WA grain growers, put forward by the Australian Grains Champion Proposal.
The booklet sets out three options for the future structure of CBH – the status quo, a distributing co-operative, and a listed entity – but not the Australian Grains Champion Proposal to commercialise CBH.
“If CBH is so confident that their options are superior to the Australian Grains Champion Proposal then they should put them side by side and let the members decide,” said Australian Grains Champion Director Brad Jones.
“Instead they are continuing to withhold the one genuine proposal with strategic Australian investors and $600 million in cash plus shares for growers in favour of a B-grade field of undeveloped options.
“As a result WA grain growers have only a $2 cheque for their longstanding patronage of CBH when under the Australian Grains Champion Proposal the average grower would potentially receive $131,000 in cash plus shares valued at $430,000 (using the Patersons Securities $2.56 billion valuation of CBH).”
Mr Jones said while the booklet attempted to explain the difference between the models, it was clearly biased towards the co-operative status quo and then a distributing co-operative.
“This is a fear campaign. To say that increasing storage and handling fees is the only way for a listed entity to produce profits shows a lack of understanding of business,” he said.
“Farmers are smart business people and they will read the information knowing CBH started with a predetermined outcome and worked backwards from there.
“The ability to put money onto their balance sheets to invest in their farm businesses, while retaining low storage and handling charges, is more important to growers today than the value of a bag of wheat in the 1930s. The grains industry has moved on and so should CBH.”
Mr Jones said farmers who attended the Australian Grains Champion tent at the Mingenew Mid West Expo had urged Australian Grains Champion to continue with its push to modernise CBH’s ownership structure.
“We were extremely pleased with the level of support we received. It is building.”
Mr Jones said the information booklet was another product of the CBH spin machine and its timetable was clearly designed to delay and frustrate Australian Grains Champion.
“Growers could have voted on the Australian Grains Champion Proposal by now if CBH hadn’t engaged in the tactics of frustration and delay. Instead we might reach a conclusion sometime in 2017,” he said.
“CBH continues to neglect the challenges the WA grains industry is facing in its communications with growers. Growing competition in our traditional markets means that we need nimble, commercial responses, not platitudes and half-baked options.”
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The Australian Grains Champion Proposal changes the structure of CBH from a co-operative to a company listed on the Australian Securities Exchange.
Australian Grains Champion and its vision for CBH have been developed by WA grain growers and leading professional advisers to:
Australian Grains Champion includes growers and leading professionals seeking to build on CBH’s proud history, to develop and drive change for an efficient and commercially-focussed business which can respond to the new competition in the WA grains industry.
The current Australian Grains Champion Board comprises grower directors Clancy Michael, Sue Middleton and Brad Jones, strategy director Samantha Tough and finance director John Corbett.