Commodities trading company Louis Dreyfus Commodities has made a recommended offer to acquire US sugar refiner Imperial Sugar in a deal valued at US$203m, including the assumption of debt.
Louis Dreyfus Commodities, a unit of Louis Dreyfus Group, is offering Imperial Sugar shareholders $6.35 per share, a 57% premium to its Monday stock closing price but below a 52-week high of $25.68 hit last August. The all-cash deal, announced today (1 May), would see Imperial Sugar shareholders recieve a total of about $78m for the company.
The proposed transaction has been approved by Imperial Sugar’s board of directors, who have agreed to recommend that Imperial Sugar’s common shareholders tender their shares in the offer.
“This is a compelling transaction that delivers significant value for our shareholders while offering financial stability and organisational resources to allow us to continue to meet the needs of our customers,” said Imperial Sugar president and CEO John Sheptor.
Louis Dreyfus Commodities said the transaction is “an important step forward” for the company in its plan to grow and diversify its global sugar activities from sugar cane crushing and international sugar trading into sugar refining and distribution in major consumer markets.
Louis Dreyfus will commence a cash tender offer no later than 11 May, it said. The closing of the transaction is expected to occur during the second calendar quarter of 2012 and is subject to the satisfaction of customary closing conditions.
In February, Imperial Sugar reported lower quarterly losses after the company’s costs fell year-on-year. In December, Imperial sold its stake in Louisiana Sugar Refining to former partners Cargill and forming co-op Sugar Growers and Refiners.