Australia’s Tully Sugar recommends sweetened bid by China’s Cofco
04 Jun 2011
The board of Australia's Tully Sugar, a canegrowers cooperative and sugar miller, has recommend the sweetened takeover offer by Cofco after China's state-owned company raised its offer from $43 a share to $44.
Cofco Corporation is China's largest diversified products and services supplier in the agribusiness and food industry.
Cofco had raised its takeover price late last month to A$43 a share from A$41 and secured 19.9 per cent of Tully, just below the legal threshold before a full bid must be made.
Other bidders like Global agribusiness and food company and the world's second-largest sugar trader Bunge Limited increased its bid to $43 a share recently from its original December offer of $41 per share, while Mackay Sugar, Australia's second largest sugar milling company and Tully's largest shareholder with 29 per cent stake, also matched Bunge's offer.
Early this month, Beijing-based Cofco again upped its offer to $44 and offered to pay the increased price to all shareholders, even to those who had already accepted its offer. It also promised to settle the deal within seven days of receiving 51-per cent acceptance.
Tully is an unlisted public company operating one of the largest sugar mills in Australia located at Tully in Far North Queensland. All of Tully Sugar's raw sugar is exported and the bi-product molasses is sold into the domestic and international cattle feed markets.
The Tully mill first opened in 1925 crushing 32075 tonnes of cane. Today about 325 growers supply the mill with more than 2 million tonnes of cane.
The company also owns and operates a number of cane farms, and has commercial and residential real estate interests in Tully.
Founded in 1952, Cofco is one of the largest state owned enterprise of the 49 directly administrated by China's State Council. Besides the sugar business, Cofco has developed itself into a diversified conglomerate, involving planting, cultivation, food-processing, finance, warehouse, transportation, port, facilities, hotels and real estate .