Archer Daniels Midland has said that it is raising the bid for GrainCorp to $2.8 billion and the company is now facing pressure from the investors to prove that its own diversification strategy would be better than the increased offer.

According to reports, Ellerston Captial and AMP are selling their holdings in GrainCorp and as a result ADM was able to acquire another 5 percent in the company on Monday. ADM has now extended its state to just less than 20 per cent making it difficult for rivals to take away the company. ADM bought shares at $12.20 on monday, which is 4 per cent higher than $11.75 it paid on October 19.

ADM has now increased the bid for the remaining shares of GrainCorp. The increased bid and the second share purchase has increased pressure on GrainCorp for proving that it will be able to generate revenues on its own if it does not accept the offer. GrainCorp is now considering the offer after stating earlier in the month that the previous offer was undervalued.

GrainCorp shares jumped 38¢ to close at a near record $12.32