Mergers tipped as AWB scraps dual share structure
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Gordon Davis ... 'restore market confidence' (ABC TV)
Wheat exporter Australian Wheat Board (AWB) says it is now free to compete equally in the new world of deregulated wheat marketing, after finally winning shareholder approval to scrap its complex dual share structure.
The move is expected to trigger consolidations in the agribusiness sector.
AWB managing director Gordon Davis told ABC1's Inside Business it is difficult to say how many major grain players there will be in two or three years.
"Over time hopefully there'll be one or two very strong, well funded, well capitalised Australian agribusinesses with very strong links back to Australian growers," he said.
As to whether AWB would be predator or prey in any takeovers, Mr Davis says: "I think we'd hope that we can build the business performance, restore the market confidence such that we're fully priced and our market, the equity value, reflects the value of the company and that is ultimately your best defence."
But AWB still has some internal issues to resolve.
The vote to end the dual share class structure had its dissenters, four of them on the AWB board.
"The tension on the board has been around the one issue, constitutional reform," Mr Davis said.
"On the commercial matters the board has worked productively and will I'm sure do that over the short period until we have the next meeting and adopt a new constitution."
The extraordinary general meeting is expected to be held in October.
There is also speculation about a name change for AWB, but Mr Davis says there are other things to focus on at the moment.
"This is a question I get asked roughly about every six months and at some point there will be a right time to move on. At this point we've got higher priorities," he said.
The full interview will air on Inside Business at 10am on Sunday
