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Share sale speculation hurts GrainCorp

AAP logoAAP 27/07/2016 Trevor Chappell

Shares in agribusiness GrainCorp have fallen sharply amid reports its major shareholder Archer Daniels Midland tried to offload its 19.9 per cent stake.

The shares dropped 49 cents, or 5.7 per cent, to $8.15, their lowest value in more than two months.

GrainCorp says it is unaware of ADM's intentions.

"GrainCorp is aware of media speculation regarding a process being conducted in relation to Archer Daniels Midland's stake in GrainCorp," GrainCorp said in a statement on Wednesday.

"GrainCorp has no information in relation to this matter and is unable to comment on ADM's intentions."

ADM has reportedly tried to sell its $400 million interest in GrainCorp but has failed to get an attractive price from potential buyers.

ADM attempted a $3.4 billion takeover of Graincorp in 2013, offering $13.20 per GrainCorp share, but was blocked by then federal treasurer Joe Hockey.

CMC Markets chief market analyst Ric Spooner said ADM had put everyone on notice that it wants to be a seller of GrainCorp shares.

"That's had the obvious impact on the stock price," Mr Spooner said.

GrainCorp's profits have been falling as the company has been affected by dry weather, lower export volumes, competition from foreign sources of grain, and weaker margins in its edible oils and feeds business.

GrainCorp's net profit in the six months to March 31 dropped from $30.2 million a year earlier to $20.4 million.

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