Bulk grain handler Cooperative Bulk Handling, Australia's largest agribusiness, has ruled out a share market listing on Friday, ending the prospect of what would have been the country's largest IPO in more than two years.
CBH in March rejected an offer from a consortium backed by GrainCorp that would have seen the cooperative bought and then listed in a deal estimated by analysts to be worth up to $3 billion.
The rejection stirred some discontent from its 4,200 farmer members, prompting CBH to commit to explore a model similar to the GrainCorp-backed consortium's proposal if a survey of farmers backed the move.
But CBH said on Friday the majority of its members wanted to maintain its cooperative structure.
While an IPO would help members cash in on their equity stake, many were worried that a change of model would mean higher charges for using the grain handler's infrastructure.
"The board has listened and unanimously resolved CBH will remain a non-distributing cooperative," said CBH chairman Wally Newman, referring to the group's not-for-profit structure.
CBH dominates grain trading in Western Australia, typically accounting for nearly half of the nation's annual wheat production, and is seen as well placed to capture growing Asian demand, analysts said.
Wheat from CBH is sold to Indonesia, China and Japan, where Western Australia supplies are particularly well suited for the production of udon noodles.
Australia's leading position in markets such as Indonesia, however, is being challenged by Russia and the Ukraine due to record global output and low freight costs.
Supporters of change believe CBH would be better placed to meet such challenges as a listed company, which would help it raise debt finance to expand and modernise.
"I voted for a change, an IPO. I don't think a non-distributing cooperative allows for CBH to make changes that will be needed to be made in the future," said John Snooke, a wheat farmer in Meckering, 130 km east of Perth.
Reuters
