ADM interest in GrainCorp revived

People who have spoken to the company since Malcolm Turnbull became Prime Minister last month, said ADM thought it was a positive sign for its lingering acquisition ambitions.

There is no suggestion another bid is imminent, but government ministers in Canberra believe it is only a matter of time before ADM has "another go" because the firm has made clear it remains interested in GrainCorp.

"I suspect Malcolm's disposition would be more likely to support it," a government source said.

A major dilemma for ADM and the new Turnbull government is the timing of any new takeover offer.

Mr Turnbull, a free market advocate, is making efforts early in his prime ministership to win over National Party MPs who were ideologically closer to the conservative prime minister Tony Abbott and who ultimately succeeded in pressuring the government to reject the original takeover proposal.

Another complication is the federal election due to be held by around September next year.

Politically, it may be easier for Mr Turnbull and new Treasurer Scott Morrison to consider a foreign takeover proposal after the election, to avoid any pre-poll scrap with National MPs like Barnaby Joyce.

However, other close observers say that if ADM made an offer sooner, it would give the new government the opportunity to send a powerful message to foreign investors that their investment is welcome.

The Abbott government's November 2013 rebuff of ADM was a glaring contradiction to its "open for business" mantra.

Joe Hockey, the then treasurer, blocked the takeover offer on national interest and competition grounds, citing concerns over the control of key infrastructure such as silos and ports.

The unprecedented decision to block a US company from buying an Australian asset upset the US State Department and US Ambassador in Canberra, John Berry.

ADM has since stepped up its Australian government relations efforts, which were widely ridiculed last time.

The company's management, including chair Patricia Woertz and new chief executive Juan Luciano, have met and spoken with Trade and Investment Minister Andrew Robb and Australian Consul-General in New York, Nick Minchin, since the rejection.

ADM controls 19.85 per cent of GrainCorp and Mr Hockey said at the time he would approve any stake up to 24.9 per cent.

A spokeswoman for ADM on Friday said it was "focused on getting a return out of our investment".

"Our near-term objective is to work together and grow the relationship to achieve returns on our 19.85 percent ownership," she said.

GrainCorp's share price has surged 11 per cent since Mr Turnbull won the leadership ballot against Mr Abbott on November 14, on market speculation that the new government would be more open to approving a deal.

The plunge in the Australian dollar to US72¢, from US92¢ in November 2013, would make it significantly cheaper for ADM to take out the rest of the east-coast grains handler.

As the minister legally responsible for adjudicating large foreign takeover proposals, Mr Hockey was the public face of rejecting the bid. The rebuff surprised many, because Mr Hockey is philosophically a supporter of free markets and small government.

However, it is understood Mr Abbott leaned heavily on his treasurer to block the deal, to appease National Party MPs.

Government sources said the "win" for the Nationals helped buy their support on other contentious matters, including Mr Abbott's very generous paid parental leave scheme and the government opting to not bail out Qantas and car manufacturers.

Chicago-based ADM was interested in GrainCorp to make up for its under exposure to the huge China market.

ADM has been investing heavily in the Asia-Pacific region.