UPDATE 3-ADM's $2.8 bln GrainCorp bid seen flushing out more offers

Sun Oct 21, 2012 10:33pm EDT
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* GrainCorp shares surge more than 40 pct to top ADM offer

* Bid comes amid global consolidation in grains sector

* Potential rival bidders include Bright Foods, Bunge, Wilmar, Louis Dreyfus

* Bid undervalues GrainCorp - analysts

By Narayanan Somasundaram

SYDNEY, Oct 22 (Reuters) - U.S. agriculture giant Archer Daniels Midland has bid $2.8 billion for GrainCorp , sending shares in Australia's last independent grains handler soaring, as markets bet on a higher offer price or rival bids being flushed out.

ADM's bid comes at a time of consolidation in the global grains sector amid intense competition for grains trading power to feed fast-developing countries seeking food security.

Australia is a coveted market with a stable policy regime and good links to Asia. After a string of deals GrainCorp is the last available asset, which can give full access to the world's second-biggest wheat exporter.

"The market is clearly speculating the offer won't be successful as it is. There is hope for rival offers or a higher price to seal the deal. It is very early days," said Paul Xiradis, chief executive at fund manager Ausbil Dexia, which owns shares in the Australian grains group.   Continued...