Bright Food considers ditching CSR offer

CSR owns the Chelsea Sugar Refinery in Birkenhead. Photo / NZ Herald

China's Bright Food Group may scrap a proposal to buy CSR's sugar business for A$1.5 billion ($1.4 billion) unless the Australian company agrees to discuss the offer soon, the Australian Financial Review said.

Bright Food executives in Sydney and Shanghai are ready to start discussions, the newspaper said, citing an unidentified person it said was close to the Chinese company. CSR, Australia's biggest sugar producer, rejected the approach last Friday, saying a demerger is its "preferred option".

CSR, Australia's second-largest maker of building products, is seeking to sell the sugar business to take advantage of surging prices.

The unit may be a target for companies such as Bunge and Cargill, RBS Equities (Australia) said this week.

The bank said an enterprise value of more than A$1.5 billion was "entirely conceivable".

CSR's sugar business includes the Chelsea Sugar Refinery in Birkenhead, Auckland.

Bright Food, which approached CSR through its Shanghai Sugar Cigarette & Wine unit, plans to make a firm bid before CSR asks its shareholders to vote on a demerger of the unit, the Review said.

Shares in another Bright unit, Bright Dairy & Food, were suspended from trade in Shanghai until tomorrow pending an announcement.

The company is currently discussing an "important issue," it said without giving more details.

Australia's second-largest maker of building products plans to carry out the spin-off of the sugar unit by March 31.

- BLOOMBERG