Tully sugar board rejects merger
MARYBOROUGH Sugar Factory’s attempted takeover of unlisted north Queensland mill Tully Sugar has soured.
The company’s directors yesterday unanimously advised shareholders to reject Maryborough’s merger bid, which valued the mill at $90 million based on an offer of 13 MSF shares for each Tully share.
Tully chair Dick Camilleri said the board maintained the mill would create more value if it remained independent.
Tully’s board had also been anxious about a drop in MSF’s share price following its decision to raise more than $10 million at $2 a share in order to sweeten the proposed takeover with a cash component.
Tully did not know the reasons for MSF’s capital-raising plan, or how MSF wanted to use the proceeds.
He said shares in MSF, the ASX’s only listed pure sugar company, have dipped to as low as $2.03 since the takeover announcement, almost 10 per cent less than the $2.25 price it had based the merge on.
“The real value of the offer is entirely dependent upon the price at which MSF shares are able to be sold on the ASX.”
MSF boss Mike Barry, in Korea on business, yesterday told the Chronicle he thought Tully’s recommendation had “limited” grounds based on data in the board’s response.
He said MSF’s valuations had been “right about on the market”.