CSR awaits firm bid for sugar sell-off

CSR Ltd., Australia“s second-largest building-products maker, expects Shanghai“s Bright Food Group Co. to return with a firm bid for its sugar unit in a few weeks, giving it an alternative to a plan…

CSR Ltd., Australia“s second-largest building-products maker, expects Shanghai“s Bright Food Group Co. to return with a firm bid for its sugar unit in a few weeks, giving it an alternative to a plan to spin off the business. A “timely” decision by the Foreign Investment Review Board, also known as FIRB, on Bright Food“s proposed AUD 1.75 billion bid for the Sucrogen unit is needed, CEO Jeremy Sutcliffe said 12 May 2010 in Sydney. CSR, which announced an annual loss, is seeking to focus on its building business by spinning off Australia“s largest sugar producing business. Bright Food raised its bid by 17% in April 2010. “They are trying to keep both balls in the air to try and maximize the outcome for shareholders,” said Richard Morris at Constellation Capital Management in Sydney. “They don“t want to rule out either option at this stage”. The loss for the year ended 31 March 2010 narrowed to AUD 111.7 million, or AUD 0.082 a share, from AUD 326.5 million, or AUD 0.297, a year earlier, the Sydney-based company said. Improved earnings from its sugar business helped, while the loss was inflated by one-time costs of AUD 532.5 million related to its Viridian glass business, a product liability provision and other asset writedowns. Spinoff documents could be ready by the end of June 2010, clearing the way for an August shareholder vote, while Bright Food was likely to be “back at the table,” Mr. Sutcliffe said. “It would not be helpful to the Bright proposal or to CSR“s other business separation considerations for FIRB to have an extended period of deliberation”, he said. Earnings before interest and tax from building products fell 2% to AUD 115 million, excluding the Viridian charge. Aluminum profit rose 12% to AUD 124 million. The business will benefit from increased housing construction in the current fiscal year, with the company assuming Australian housing starts of about 146,000 in the 12 months to 31 March 2010, Rob Sindel, head of CSR“s building products unit said.