Thais take out MSF Sugar as bid goes unconditional

Mitr Phol said 19.8 per cent of shareholders had accepted its $4.45 a share offer under the institutional acceptance facility, lifting its stake in MSF to 57.7 per cent.

Shareholders accepting included the hedge fund Centaurus Capital, which held 8.52 per cent of MSF and was presumed to be betting a counter-offer would emerge. Mitr Phol's offer was first announced in November.

The RBS Morgans analyst Belinda Moore said with each day passing a counter-bid looked less likely and the Mitr Phol takeover now looked "a bit inevitable".

The Foreign Investment Review Board approved the takeover in December and remaining shareholders have 21 days to accept. MSF shares rose 2? to $ 4.44 yesterday.

If completed the MSF takeover will leave the former co-operative Mackay Sugar, the country's second-largest raw sugar producer, with revenues of more than $300 million, as the last major milling operation in Australian hands.

In recent years Singapore's Wilmar International has bought Sucrogen from CSR, and the Proserpine Co-operative Sugar Milling Association from administrators KordaMentha, while the China Oil and Food Corporation bought Tully Sugar.

Mackay Sugar's chairman, Andrew Cappello, told shareholders in December the company was watching the bids for Maryborough and Prosperine with "great interest".

"With the industry consolidating around us, there is a possibility we will too receive an unsolicited take-over bid. The board is prepared for such a situation."

World sugar prices were volatile last year and the Commonwealth Bank analyst Luke Mathews expects that volatility to continue this year as China's total sugar demand surges and stockpiles remain low.

Mr Mathews said disappointing Brazilian sugar cane production in 2011-12 was offset by better than expected production elsewhere, including Australia where sugar output rose 8 per cent despite adverse weather. Higher local production was forecast in 2012-13, he noted.