US-based agricultural giant Archer-Daniels-Midland Company (NYSE: ADM) has made an offer of AUD11.75 per share for AE Portfolio Aggressive Holding GrainCorp Ltd (ASX: GNC, OTC: GRCLF).

GrainCorp opened on the Australian Securities Exchange (ASX) Monday morning in Sydney after it made a statement confirming the bid. The shares leapt to AUD12.69 at the opening bell but settled later in the day to close at AUD12.30, up 38.98 percent from its previous close, AUD8.85 on Oct. 18.

The grain handler with a virtual monopoly on Australia’s East Coast market is priced 4.68 percent above ADM’s offer, as market participants expect the target to push for a higher price or for other bids to surface.

GrainCorp released a statement before Monday morning’s open in Sydney confirming receipt on Friday morning, Oct. 19, of “an indicative, non-binding proposal from ADM stating it is prepared to make an offer to acquire the outstanding shares in GrainCorp at a price of $11.75 per share in cash, subject to a number of conditions including due diligence, exclusivity and approval by the ADM board.”

GrainCorp also confirmed that ADM has acquired a 14.9 percent stake “through equity derivative contracts.” GrainCorp’s board is reviewing the proposal, hasn’t expressed an opinion on it and will make further comment to the market as the situation develops.

In its statement GrainCorp described its portfolio of “integrated, strategic” assets as “unique” and expressed confidence in its own strategy to build shareholder value. That’s about as clear an indication that the board and management of GrainCorp are looking for a higher bid as you’re likely to get in these situations.

According to a report in The Australian, GrainCorp is unlikely to grant ADM exclusive access to its books absent a higher bid.

GrainCorp’s assets include more than 280 grain storage sites, 19 trains, seven bulk ports and two container ports. The company handles approximately 60 percent of eastern Australia’s grain corp on an annual basis. It also provides malt products to brewers and distillers. Illinois-based ADM is one of the largest agricultural processors in the world, with more than 270 processing plants, 420 crop procurement facilities and a significant crop transportation network.

There is no shortage of names being thrown around as potential competitors to ADM for GrainCorp.

JPMorgan, in a research note wherein it boosted its price target on the stock to AUD13 from AUD10.10, identified privately held Minnesota-based international producer and marketer of food and agriculture products Cargill Inc, France-based agriculture, oil, energy and commodities company Louis Dreyfus Group, privately held Nebraska-based agriculture and energy firm Gavilon and New York-based global agribusiness and food company Bunge Ltd (NYSE: BG).

Asia-based entities that could bid include Singapore-based grain and oilseed company Wilmar International Ltd (Singapore: WIL, OTC: WLMIF, ADR: WLMIY), which shot down rumors that it had purchased a large stake in GrainCorp last week, Singapore-based agriculture commodities supplier Olam International Ltd (Singapore: OLAM, OTC: OLMIF, ADR: OLMIY), Hong Kong-based bulk commodities trade Noble Group Ltd (Singapore: NOBL, OTC: NOBGF, ADR: NOBGY), China-based privately held agriculture and food producer COFCO, Hong Kong-based food processor China Foods Ltd (Hong Kong: 506, OTC: CHFHF, ADR: CHFHY) and China-based privately held food and beverages manufacturing company Bright Foods.

Based on Monday’s closing price in Sydney GrainCorp has generated a total return of 107.4 percent in US dollar terms since we initially recommended the stock as part of the original AE Portfolio on Sept. 26, 2011. Investors who got in on our initial recommendation should book at least a partial gain based on today’s action.

At these levels GrainCorp is now a hold.