Over the past few months we have spoken with most of you about our proposal to commercialise CBH and establish a strong platform for the next 70 years. We have been enormously encouraged by the hundreds of growers who have contacted us to express support and to provide positive and constructive feedback.
Australian Grains Champion is a movement that was developed by and for Western Australian growers. We are deeply passionate about the future of our industry.
AGC has, however, decided to withdraw our proposal that is currently before the CBH Board.
This decision to withdraw was difficult and made reluctantly, however we feel it is appropriate in the light of CBH’s ongoing complex and long-winded structure and governance review. The decision will give all of us the time, space and opportunity to focus squarely on the CBH board process and the forthcoming (hopefully large!) harvest.
We are pleased to note that AGC’s proposal has already had a positive impact on CBH: forcing it to commence its review and to improve the efficiency of its network restructure plan by hundreds of millions of dollars. However, these are just the first steps in the journey – it is critical for all of us and our families that CBH’s structure review does not end up as just another window-dressing exercise.
We are proud that our Proposal could have provided the 4,200 CBH members with $600 million of cash and an additional $2 billion of shares in a listed company (based on Patersons Securities independent valuation of CBH*). The smallest grower could have received $340,000 of value with many growers getting seven-figure amounts. Currently you have a $2 share and that is all you will receive when you leave the industry under the current structure.
The challenge of achieving meaningful reform of CBH was highlighted by the Board’s hurried rejection of our proposal and the huge amount of time and money they have spent to resist you being given a fair chance to consider the Australian Grains Champion proposal. Adaptability to the extreme challenges of the global market will remain difficult while the Board is so entrenched in its opposition of anything but the status quo.
At the end of the day, CBH is owned by you and other WA grain growers. Collectively, we are the ones that should be deciding on the future of our industry. While AGC never asked – nor expected – CBH’s Board to recommend our proposal to you, at the very least they should have given you the chance to consider it fairly and to exercise your right as an owner of the business.
Individually, we are all looking forward to playing an ongoing positive and constructive role in the evolution of CBH. We have been inspired and invigorated by the response we have had from our colleagues in the industry over the last eight months.
We wish you all the best for a smooth, safe and successful harvest!
Australian Grains Champion Directors
*Paterson’s valuation of 19 July 2016