Sweet deal as GPG sells stake in Maryborough Sugar Factor

Monday 1st November 2010

Mitr Phol Sugar, Thailand’s biggest sugar company, agreed to acquire up to 19.9% of ASX-listed Maryborough Sugar Factor from Guinness Peat Group.

Mitr Phol would pay A$4 a share in cash for most of GPG’s holding, valuing a 19.9% stake at A$52 million. That’s a hefty premium to Maryborough’s share price on the ASX last week of A$2.73. The deal is subject to review by Australia’s Foreign Investment Review Board.

GPG began acquiring shares in Maryborough in mid-2008 and this month announced it had lifted its stake to 24.5% from 23.4%. Its last purchase was via the company’s dividend reinvestment plan, which gave GPG 171,450 shares at about A$2.50 apiece.

Shares of Maryborough have surged 61% since early July. In April the company entered a Northern Milling joint venture agreement with Bundaberg Sugar, merging the northern milling plants of both companies, and retains a call option over the remaining 50% of the JV for A$50 million.

An attempt to merge with Tully Sugar last year failed to eventuate and chairman James Jackson said in Maryborough’s annual report that capacity utilisation of its plants, at 71% has improved “But still remains unsatisfactory.”

Global demand for sugar is growing at about 2% a year, he said.

Guinness Peat’s NZX-listed shares were unchanged at 72 cents and have declined 14% in the past year.

Businesswire.co.nz

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