UPDATE 2-U.S. grain handler Andersons rejects HC2's $1 bln bid

Wed May 18, 2016 4:27pm EDT
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By Tom Polansek

May 18 (Reuters) - Loss-making U.S. grain handler Andersons Inc on Wednesday rejected a $1 billion takeover offer from HC2 Holdings Inc as too low, calling the bid an attempt to capitalize on a sharp downturn in the agricultural economy.

With the U.S. farm sector drowning in supplies that have depressed crop prices, the Ohio-based agribusiness said it was better off remaining a "standalone entity" than selling to the holding company run by former hedge fund manager Philip Falcone.

HC2's takeover offers "represent an opportunistic attempt to acquire the company at a low point in the industry cycle," Chairman Mike Anderson said in a statement. HC2 had no immediate response.

Grain companies, including larger rivals Archer Daniels Midland Co and Bunge Ltd, have suffered as the global glut has hurt U.S. exports and encouraged farmers to keep their harvests in storage, rather than selling them to merchants.

Andersons, which buys grain, produces ethanol and leases rail cars, swung to a net loss in 2015 and in the first quarter of 2016. Before HC2's bid became public, Andersons' stock price was down nearly 45 percent over the past two years.

Shares were up 26.3 percent at $32.75 in afternoon trading and rose as high as $35.29, shy of HC2's latest offer of $37 a share. HC2 shares rose 1.5 percent to $4.05.

Mike Anderson, grandson of the grain company's founder, denied HC2's claim that it had not substantively responded to the offer. In January, HC2 offered $35, according to his statement.   Continued...