DISTRIBUTOR and marketer Queensland Sugar has decided to sell its 19.9 per cent stake in Tully Sugar to takeover contender Mackay Sugar for $43 a share, sparking a fresh bidding war from two other interested parties, US giant Bunge and China’s state-owned Cofco.
The news came as Cofco announced the Foreign Investment Review Board had approved its deal to buy a 19.9 per cent stake in Tully and its decision to increase the holding.
On Friday, Mackay upgraded its offer for Tully by $2 to $43 a share (the same price offered by Bunge and Cofco), valuing Tully at $132.9 million.
The combined Queensland Sugar/Mackay holding in Tully now totals almost 30 per cent.
Cofco has a precommitment for a 19.9 per cent stake and Bunge has a small stake.
Mackay’s bid is backed by French-based commodity trader Louis Dreyfus, which has agreed to provide debt funding of up to $102m.
Tully is one of the last independent, grower-owned sugar mills in Australia and also owns residential properties in far north Queensland and other assets.
Mackay is the country’s second-biggest sugar milling company, owning three mills and a refinery in Queensland. Continue reading
MACKAY Sugar has formally lodged its $41 a share bid for Tully Sugar, even though US-based agribusiness giant Bunge and China’s state-owned Cofco have already revised their bids higher to $43 a share valuing Tully at $132.9 million.
Mackay’s bid is backed by French-based commodity trader Louis Dreyfus, which has agreed to provide debt funding of up to $102 million to help fund the offer.
Mackay is Australia’s second largest sugar milling company, operating three mills, a refinery, and producing molasses and electricity on the Queensland central coast south of Tully.
At stake is the ownership of one of the last independent grower-owned sugar mills in Australia and other assets including residential properties in the Far North Queensland town.
The Tully mill, whose operation is highly regarded in the industry, has a crushing capacity of 2.5 million tonnes of cane a year and produced 315,000 tonnes of raw sugar in 2002, before production started falling as a result of a series of poor crop seasons.
“By accepting Mackay Sugar’s offer, you are ensuring Tully Sugar’s business remains in Australian hands, managed by a professional grower-controlled company” that has a proven track record of working with growers to deliver higher prices and a more secure and diversified business while investing in the industry, Continue reading
A brushfire burned about 10 acres of cane field in Paia early this morning, Maui County officials reported.
Firefighters responded to the 1:22 a.m. fire at the Hawaiian Commercial & Sugar Co. site on Baldwin Avenue between Paia Elementary School and Rainbow County Park, Maui County spokesman Rod Antone said.
Plantation workers helped firefighters battle the blaze, which was declared under control by 3:30 a.m., Antone said. The cause of the fire is still under investigation. The fire may have started close to Baldwin Avenue. The cane burned was close to harvest and the company may be able to salvage some of the crop, officials said.
Although its agribusiness sector continued its recovery in the first quarter, Alexander & Baldwin’s usual profit center, Matson Navigation Co., lost money, and the company reported a thin profit of $5.2 million, or 12 cents per share, Tuesday.
President Stanley Kuriyama said Matson couldn’t adjust its fuel surcharges fast enough to keep up with soaring oil prices.
Agribusiness, primarily Hawaiian Commercial & Sugar Co., had an operating profit of $2.6 million, compared with a loss of $1.1 million in the first quarter of 2010.
It is difficult to compare quarter-to-quarter results for HC&S, since in the first quarter of 2010 the Puunene mill shut down for an extended overhaul and harvesting did not begin until the second quarter. But Kuriyama pointed out that the company’s agriculture operation has now experienced four straight quarters of profitability, following years of serious losses.
It is also difficult to compare quarter-to-quarter changes at Matson, because it signed a significant connecting carrier agreement with a large international carrier and opened a second service to China. Both increased business, but the startup costs for the second “string” of voyages to China resulted in a loss.
Hawaii container traffic was up to 34,000, from 31,400 the year before, partly indicating expansion in the island economy. Continue reading
On May 26, 2009, Robert Lustig gave a lecture called “Sugar: The Bitter Truth,” which was posted on YouTube the following July. Since then, it has been viewed well over 800,000 times, gaining new viewers at a rate of about 50,000 per month, fairly remarkable numbers for a 90-minute discussion of the nuances of fructose biochemistry and human physiology.
Lustig is a specialist on pediatric hormone disorders and the leading expert in childhood obesity at the University of California, San Francisco, School of Medicine, which is one of the best medical schools in the country. He published his first paper on childhood obesity a dozen years ago, and he has been treating patients and doing research on the disorder ever since.
The viral success of his lecture, though, has little to do with Lustig’s impressive credentials and far more with the persuasive case he makes that sugar is a “toxin” or a “poison,” terms he uses together 13 times through the course of the lecture, in addition to the five references to sugar as merely “evil.” And by “sugar,” Lustig means not only the white granulated stuff that we put in coffee and sprinkle on cereal — technically known as sucrose — but also high-fructose corn syrup, which has already become without Lustig’s help what he calls “the most demonized additive known to man.”
It doesn’t hurt Lustig’s cause that he is a compelling public speaker. Continue reading
Alexander & Baldwin Inc. has been in business 141 years, and for most of that time the kamaaina company has stood on three legs, each representing a major industry closely tied to Hawaii — agriculture, shipping and real estate.
The stool has been pretty sturdy, enabling the Honolulu-based company to realize or improve gains from one industry with the help of another, or to rely on different legs to weather downturns in others.
But at times in A&B’s history, influential shareholders have questioned the structure and made attempts to sell off pieces of the publicly owned firm.
Two weeks ago, a new plan to dismantle the stool is suspected of being set in motion by New York hedge fund manager Bill Ackman, who recently bought 10 percent of A&B with an associate to become the company’s largest shareholder.
Ackman hasn’t publicly detailed his intent, but said in a broad statement that he plans to hold discussions with A&B management, directors, other stockholders and other parties “concerning the business, assets, capitalization, financial condition, operations, governance, strategy and future plans” of the company.
A&B has said it is open to hearing Ackman’s ideas, but won’t comment on the subject of discussions. Continue reading
Shares of Alexander & Baldwin stock soared 19 percent today to close up $8.82 at $54.47 following yesterday’s announcement that a New York hedge fund manager and a partner bought up shares to become A&B’s largest owner.
The closing price was the highest since Sept. 9, 2007, when A&B’s stock closed at $57.73 on the New York Stock Exchange.
Bloomberg News reported that Wells Fargo Securities, which downgraded A&B’s stock last week, raised its expectations for the stock and estimated A&B’s “break up” value — that is splitting apart core divisions of ocean cargo transportation, commercial real estate and agribusiness potentially to be sold — at about $54 a share.
Stock analysts and some company insiders anticipate that the hedge fund manager, Bill Ackman of Pershing Square Capital Management LP, will seek to break up A&B.
Ackman’s firm, along with former Pershing Square partner Richard McGuire of San Francisco-based Marcato Capital Management LLC, disclosed yesterday after the stock market closed that they recently bought $168 million of A&B’s stock to give them a 9.9 percent stake.
Ackman and McGuire paid an average of $41.04 for their shares, making their stake worth about $224 million at today’s closing price, or $56 million more than the average paid.
One of Hawaii’s last venerable Big Five companies, Alexander & Baldwin Inc., could be under pressure to break itself up.
A New York hedge fund manager known to agitate for change in his investment targets bought nearly 10 percent of A&B along with a partner, it was announced yesterday. The purchase triggered expectations the 141-year-old kamaaina company will be split into pieces to elevate stock value.
Neither A&B nor the hedge funds would disclose what the intent of the A&B stock purchase — a $168 million deal — might be yesterday.
“We expect to have a constructive dialogue with them as we do with all of our shareholders,” said Suzy Hollinger, A&B’s director of investor relations.
But stock analysts with insights to A&B and people with ties to the 2,300-employee company say the play almost certainly is a breakup of the conglomerate’s three core businesses — ocean cargo transportation, commercial real estate and agriculture.
“Are the parts worth more than the whole? That’s what this comes down to,” said local stock analyst Randy Havre, echoing views of two other analysts who closely follow A&B. Continue reading
Two mainland investment firms have combined to purchase a 9.9 percent stake in Honolulu-based Alexander & Baldwin Co., according to a regulatory filing today.
New York-based Pershing Square Capital Management LP, led by activist hedge fund manager Bill Ackman, bought an 8.6 percent stake and San Francisco-based Marcato Capital Management LLC, led by Richard McGuire, acquired a 1.3 percent stake.
Alexander & Baldwin Inc. earnings were about flat in the last three months of 2010, but bigger gains earlier in the year enabled the diversified Honolulu-based company to more than double its full-year profit.
A&B reported 2010 net income of $92.1 million, up from $44.2 million the year before.
Fourth-quarter net income was $20.2 million, barely up from $20.1 million in the same quarter in 2009.
Revenue in the fourth quarter totaled $461.4 million, compared with $362.9 million in the year-ago quarter. Full-year revenue totaled $1.6 billion, up from $1.4 billion in 2009.
A&B said its profit was principally driven by ocean cargo transportation subsidiary Matson Navigation Co. operations in China, real estate sales and a turnaround in its sugar business on Maui.