SYDNEY (Reuters) — Shares in GrainCorp fell five percent on Friday after a media report said Australia’s prime minister will reject a $2.80 billion takeover by Archer Daniels Midland Co.
GrainCorp shares hit their lowest since April 22, after the Western Australia paper said Tony Abbott will reject the deal, citing unnamed sources within the ruling Liberal Party.
A spokesman for Australia’s treasurer Joe Hockey, however, said his office alone can rule on the GrainCorp takeover.
“The prime minister does not have the power to veto the decision (on GrainCorp),” said Tony Ritchie, a spokesman for the Australian treasurer.
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GrainCorp, in a filing to Australian Securities Exchange, noted the media speculation but said it was not aware of any material information that has not been previously been disclosed to the market.
“I think the market was assuming that it was likely (Hockey) would approve it because he generally is looked upon as a liberal as opposed to a conservative politician,” said Ric Spooner, market strategist at CMC Markets.
“But if the decision is made to prevent a foreign takeover then the Archer Daniels Midland will not proceed and that’s why investors are obviously taking defensive action against that probability.”
