Move for fresh vote

Share­hold­ers called on to re-think de­ci­sion

Townsville Bulletin - - Investor - by Martin Rasini martin. rasini@ townsville­bul­letin. com. au

A GROUP of Tully Sugar share­hold­ers are mak­ing a fresh move to change the con­sti­tu­tion of the North Queens­land miller af­ter a takeover bid by US agribusi­ness gi­ant Bunge failed be­cause of a share own­er­ship rule.

The group holds about 5 per cent of shares, the req­ui­site num­ber to oblige man­age­ment to put the mat­ter to a vote. Tully Sugar chief ex­ec­u­tive John King said yes­ter­day the com­pany had re­ceived req­ui­si­tions for an­other vote from 5 per cent of share­hold­ers, and that, un­der the Cor­po­ra­tions Act, it had two months in which to stage the vote. Bunge’s $ 126.7 mil­lion takeover bid failed on Fe­bru­ary 18 when a mo­tion to al­low a sin­gle party to hold more than 20 per cent of Tully Sugar was lost by a small mar­gin. Some 72 per cent of Tully Sugar shares were voted in sup­port of it, just 3 per cent less than the 75 per cent re­quired for the mo­tion to pass.

Queens­land Sugar, with a ma­jor­ity 12.7 per cent stake, and Mackay Sugar, with 4.1 per cent, voted against the mo­tion along with some cane-grow­ers. QSL, which han­dles about 90 per cent of Aus­tralia’s sugar ex­ports, said a pro­posal from Mackay Sugar for re­main­ing in­de­pen­dents to merge might pro­vide a bet­ter long-term out­come for Tully share­hold­ers and the sugar in­dus­try.

Mr King said yes­ter­day Tully Sugar and Mackay Sugar had not met, but he ex­pected the two to dis­cuss the merger con­cept, which aims to main­tain ma­jor­ity grower own­er­ship among in­de­pen­dent mills.

Bunge bid sup­porter and Tully Sugar share­holder, Eu­ramo grower Bryce Henry, told ABC Ra­dio yes­ter­day he hoped peo­ple would re-eval­u­ate why they voted against the takeover ‘‘ and re­ally look at . . . what op­por­tu­ni­ties t hey t hink may be avail­able to them in the fu­ture if they let this vote slip. Cer­tainly in the case of Bunge . . . I feel we had the op­por­tu­nity to part­ner­ship with a world class com­pany, and tap into their ex­per­tise; and also ( it is) a com­pany with good fi­nan­cial cre­den­tials which can take our com­pany through to be­come part of a world-class en­tity.’’

Mr Henry said he was not sure Mackay had the ex­per­tise ‘‘ to take Tully where we want it to go’’.

Moves for the fresh vote come as Bunge calls on Tully Sugar share­hold­ers to eval­u­ate if the Mackay merger plan can de­liver real ben­e­fits.

In a letter this week, Bunge says ben­e­fits of the merger idea can­not be as­sessed be­cause ‘‘ there is no firm of­fer to judge’’. ‘‘ Do you be­lieve there are big cost-sav­ings and syn­er­gies . . . to cap­ture across op­er­a­tions po­ten­tially as ge­o­graph­i­cally dis­persed as Moss­man, Tully, Proser­pine, Mackay and Isis?’’ it asks. CHANGE: Tully Sugar CEO John King has re­ceived req­ui­si­tions

for an­other vote from 5 per cent of share­hold­ers

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