BRIGHT FOOD BIDS $1.75BN FOR CSR'S SUGAR UNIT
Bright Food Group Company, Shanghai's biggest food company, raised its offer for CSR Limited's sugar unit to $1.75bn ($1.6bn) after the Australian group's plan to spin off the division was blocked, according to Bloomberg on Thursday.
CSR, Australia's second-biggest building-products maker, will open talks with Bright Food after rejecting an earlier $1.5bn bid as too low, the Sydney-based company said today in a statement. Australia's Federal Court last month blocked CSR's plan to split the business off on concern it may not be able to compensate people sickened by asbestos previously contained in its products.
Bright Food would gain mills that produce 45 per cent of Australia's raw sugar and account for about four per cent of international trade by buying CSR's Sucrogen unit. Population growth, higher incomes and reduced areas of arable land may increase China's demand for farm imports, according to Ke Bingsheng, president of China Agricultural University.
'It's a reasonable price and a good step up from the previous offer,' Paterson Securities Limited. analyst Ben Kakoschke said on Thursday by phone from Melbourne. The bid represents about a 10 per cent premium to Kakoschke's $1.6bn valuation of the assets, he said.
CSR closed six per cent higher at $1.755 in Sydney. The shares touched $2.13 on January 12 after Bright Food made its initial approach and fell to as low as A$1.585 on March 2.
Bright Food joins Chinese companies including China Minmetals Group and Aluminum Corp. of China in seeking Australian commodity and energy assets as demand rises for food, metals and energy in the world's fastest-growing major economy.
A total of $29.6bn has been offered for Australian- based companies in announced deals so far in 2010, according to data compiled by Bloomberg, more than double the $13.7bn in the same period last year, and the busiest start to a year for takeovers for at least a decade.
CSR is still considering separating the sugar business while it talks with Bright Food about the proposal, the company said in the statement.