Graincorp launched an unsolicitated takeover bid of the leading feedstocks producer in May, at which time the Ridley board rejected what was valued as being a $400 million offer.

Ridley directors have again recommended shareholders reject the GrainCorp offer of one share for every nine Ridley shares, and take no action in respect of materials sent to them by GrainCorp.

Ridley chairman, Dr John Keniry, the offer was "opportunistic" and undervalued Ridley.

"If accepted [it] would expose Ridley shareholders to increased volatility in earnings and dividends," Dr Keniry said.

"The only major change has been in GrainCorp's share price, which has fallen substantially and accordingly the value of the GrainCorp all scrip offer has reduced by more than 42pc since its bid was announced.

"The value implied by the GrainCorp offer is now 80 cents per Ridley share, some 27pc below the closing price of $1.09 on Tuesday 15 July, and indeed is now at a discount to the Ridley share price at any time over the last six years."

Dr Keniry also hit out at the bid process, saying it was an expensive distraction for Ridley management.

"This is frustrating, given that the current GrainCorp offer is clearly destined to fail," he said.

"Ridley's priority is to execute the clear strategy it has articulated in order to generate improved shareholder returns," he said.

All directors hold Ridley shares and intend to reject GrainCorp’s offer with respect to their own shareholdings.

Directors recommend shareholders reject for three reasons:

* GrainCorp's offer is inadequate;

* the future value of GrainCorp shares is uncertain; and

* Compared to Ridley, GrainCorp has a poor track record of paying dividends.