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With Archer Daniels Midland (ADM) seeking cash to seal a purchase of Australia's GrainCorp...

With Archer Daniels Midland (ADM) seeking cash to seal a purchase of Australia's GrainCorp (GRCLF.PK), Mexican corn flour and tortilla concern Gruma (GMK) is repurchasing stakes in itself from ADM for $450M. Family-controlled Gruma is borrowing $400M in one-year bridge loans to finance the buyback.
Comments (3)
  • movies555
    , contributor
    Comments (994) | Send Message
     
    Glencore bought Viterra, now ADM is buying (although it remains to be seen if they'll accept) Graincorp.

     

    There are really only one or two companies where the primarily business is what I call "agricultural infrastructure" left - The Andersons (ANDE) and Alliance Grain (AGXXF.pk)

     

    Graincorp has tremendous assets, but it remains to be seen how ADM's terrible management will handle the buy. I think ADM eventually is bought by Berkshire.
    15 Dec 2012, 04:23 PM Reply Like
  • MexCom
    , contributor
    Comments (3058) | Send Message
     
    GMK ADRs have been strong these past two days on the NYSE. Overall the shares have greatly appreciated from their multi-year low that occurred after their difficulty with management of their hedging activities. A previous recent spurt in price increase occurred when it was said that Pardo would be buying the ADM stake in the company. Now this news as referenced is that the company itself would do the share buyback. If for cash, such a deal would increase stockholder equity on the balance sheet but the company seems to want to increase leverage. With current interest rates low and the affirmation of their current credit rating, this could be a very positive development for shareholders. People in the know may have boosted up the stock price already.

     

    Many years ago these ADR's were in the 30's and Gruma was considered a Mexican blue chip - owned by the larger Latin American exposed mutual funds.

     

    My interest in the company is favorable from their recovery in recent years and their expanding business with much international exposure and favorable/increased demand for their products. Financially, this proposed share buyback indicates considerable strength.

     

    I currently have a larger than normal position in my portfolios on speculation that their prospects are going to continue favorable. I currently expect to continue to hold to see how the market reacts to this new development.

     

    In general - I am very positive on the Mexican market. I recently started a position in CX. Mexico recently announced a new oil discovery in the Gulf of Mexico. Their economy is growing.
    15 Dec 2012, 06:25 PM Reply Like
  • CJoyce316
    , contributor
    Comments (98) | Send Message
     
    MexCom, the only exposure I have to the Mexican market is the new Santander offering its good to get other idea, all you hear these days is Mexico will dominate the new manufacturing scene for the US from autos and other factories.
    15 Dec 2012, 07:32 PM Reply Like
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