Reuters — Australia’s GrainCorp Ltd. on Wednesday said it was providing suitor Long-Term Asset Partners (LTAP) due diligence to put forward a more certain proposal.

The country’s largest listed bulk grain handler earlier on Dec. 3 received a buyout proposal from little-known asset manager LTAP in an all-cash deal for A$2.38 billion (C$2.303 billion), or $10.42 per share, a near-43 per cent premium to the stock’s previous closing price.

“LTAP proposal at this stage is not sufficiently certain or in a form which would allow the board to make a recommendation to shareholders,” GrainCorp chairman Graham Bradley said in a letter to shareholders.

“At this stage, there is no certainty that our engagement with LTAP will result in a binding proposal for GrainCorp, what the terms of any such proposal would be, or whether it would be recommended by the GrainCorp board,” the statement said.

GrainCorp, whose holdings in Canada include Canada Malting and a joint-venture stake in Prairie grain handler GrainsConnect Canada, also sought additional information from LTAP on its longer-term financing plan and intentions.

Shares in GrainCorp recorded their biggest one-day move in five years after the offer but were still well below the indicative offer price, reflecting uncertainty on whether a deal would go ahead.

The approach from LTAP comes as a drought wilts crops across Australia’s east coast, limiting GrainCorp’s ability to earn revenue from international grain trading.

GrainCorp said it expects to share the results of the ongoing review of its portfolio of assets with shareholders at or before the annual general meeting on Feb. 20.

— Reporting for Reuters by Aby Jose Koilparambil in Bangalore.