Maryborough to make $90.4 million offer for Tully Sugar

Australia's Maryborough Sugar Factory, the only listed pure sugar company has said it intends making a $90.4 million offer to take over the unlisted Tully Sugar.

The company is offering 13 of its shares which last traded at $2.20 each for every Tully share. This would put a value of $29.95 on each Tully share with the company being valued at  $90.4 million

If the offer is accepted, Maryborough said it would issue 40.2 million new shares with Tully shareholders who will collectively own 46 per cent of the merged company said in a statement.

The merger will herald the emergence of a significant player in the Australian sugar industry with an installed cane crushing capacity of about 5 million tonnes a year, producing 500,000 tonnes of raw sugar a year and with cane farms, water rights and per cent of Sugar Terminals. The company would own seven bulk sugar export terminals along Australia's northeast coast, according to Maryborough.

James Jackson, Maryborough chairman said the success of the proposal would see Tully shareholders become investors in a widely held sugar company with significant value and a clear mandate of continued growth in Far North Queensland

An earlier merger proposal had been abandoned in May when the two companies could not agree on the terms of any transaction, though they agreed on the strategic logic of a merger.