The release of an independent valuation of CBH of at least $2.56 billion by respected WA-based stock broker Patersons Securities last week gives Western Australian grain growers even more reason to consider the Australian Grains Champion Proposal to commercialise CBH.
Based on Patersons’ $2.56 billion valuation of CBH, the average Western Australian grower delivering 2,500 tonnes could receive $131,000 in cash plus shares valued at $430,000* if the Australian Grains Champion Proposal is successful.
Using the Patersons’ volume growth model of 2.8% (the average increase in crop size over the past 40 years versus the 2% growth rate used for the $2.56 billion valuation) CBH’s value would be $2.96 billion. Under this valuation the average Western Australian grower delivering 2,500 tonnes could receive $140,000 in cash plus shares valued at $520,000* if the Australian Grains Champion Proposal is successful.
“No matter which Patersons’ valuation and associated assumptions are used, the valuation indicates at least $560,000 of value could be unlocked for the average grower if the Australian Grains Champion Proposal is successful. Growers would also hold a significant ownership interest in the company and enjoy a cap on storage and handling fees,” said Australian Grains Champion Director Brad Jones.
“That is a significant amount of money that could fund investment in farm expansion, productivity upgrades, retiring net debt or generational change.
“The Australian Grains Champion Proposal is the only real proposal available to growers.”
Mr Jones said the CBH Board should allow Australian Grains Champion to conduct due diligence so its Proposal could be subjected to an Independent Experts Report and a vote of growers whether to accept the Proposal and the opportunities it provides.
While Australian Grains Champion has previously been able to provide growers with the number of shares they would receive as part of the Australian Grains Champion Proposal relevant to their individual tonnage, the release of the Paterson’s valuation provides growers with a potential value of those shares.
|Patersons’ $2.56 billion valuation||Patersons’ $2.96 billion valuation|
|5yr Avg Tonnes||$$ received||Value of Shares Received*||Total Value Received*||$$ received||Value of Shares Received*||Total Value Received*|
“Currently each grower’s share in CBH has a nominal value of just $2. That’s little reward for helping to build a Co-operative which has now been ascribed a value by Patersons of at least $2.56 billion. Australian Grains Champion wants to unlock value for growers and create additional value by growing CBH into a South East Asian grains powerhouse,” Mr Jones said.
According to Patersons, the major advantages of CBH becoming a public, listed company include:
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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.