Bunge Makes A$126.7m Recommended Cash Offer for Tully Sugar
Combining with Tully Sugar is an ideal next step in Bunge’s strategy of building a large-scale global sugar business.
12/29/2010 --- Tully Sugar Limited and Bunge Agribusiness Singapore Pte Ltd., a wholly owned subsidiary of Bunge Limited announced that Bunge will offer A$41.00 cash per share for Tully Sugar (the “Offer”) in an off-market takeover offer valuing Tully Sugar at approximately A$126.7 million.
The Tully Sugar Directors unanimously recommend that shareholders accept the Offer and vote in favour of the resolution to remove the 20% shareholder cap in the absence of a superior offer. Tully’s Directors intend to accept the Offer in respect of Tully Sugar shares they own.
Tully Sugar Chairman Dr Ralph Craven said: “The Bunge Offer provides substantial value to all Tully Sugar shareholders. With its deep trading experience and global reach, Bunge brings operating and financial strength to Tully Sugar. The Australian sugar industry and the Asian region are evolving quickly. The Tully Sugar Board believes the association with Bunge will assist Tully to evolve successfully with these changes.”
Christopher White, Chief Executive Officer of Bunge Asia, said: “The partnership with Tully Sugar will be an excellent complement to Bunge’s existing global sugar footprint. Bunge has substantial milling and refining assets in Brazil, backed by a global trading and merchandising organisation headquartered in London. Combining with Tully Sugar is an ideal next step in Bunge’s strategy of building a large-scale global sugar business. It is a first class facility located in the key North Queensland sugar growing region, which is a geographically advantaged supplier to Asia, the world’s fastest growing consumer of sugar. We look forward to linking Tully Sugar to our global business and we are keen to explore possibilities for expanded cane production.
“Bunge is committed to the ongoing success of Tully Sugar’s operations and to the growers with whom it partners. We will honour the contractual obligations that Tully Sugar holds with both growers and with Queensland Sugar Limited (QSL). We are delighted that the Board of Tully Sugar has chosen to unanimously support the transaction, and we look forward to working closely with Tully Sugar’s management team to complete the Offer.” Tully Sugar and Bunge have entered into a Bid Implementation Agreement effective today that will govern Bunge’s Offer. Key provisions include:
-Bunge agrees to pay A$41.00 cash per share for Tully Sugar shares, with the Offer conditional on a 50.1 per cent minimum acceptance;
-Tully Sugar will convene a shareholder meeting to vote on the amendment to the 20% shareholder cap that the current constitution stipulates;
-The Offer will remain open for up to two weeks following the positive conclusion of that shareholder meeting;
-The Offer is also subject to no prescribed occurrences, no regulatory action and no material adverse change conditions.
The Implementation Agreement contains standard exclusivity restrictions on Tully Sugar, mutual break fees and other customary terms and conditions. The offer document, containing full details of the Offer, and a shareholder Notice of Meeting will be issued to all Tully Sugar shareholders in January 2011. Tully Sugar shareholders are advised to take no action in relation to their shares until they receive and read the Bunge Offer document and the Tully Sugar notice of meeting.