Illovo says Tereos bid talks end, still on with ABF

Reuter Agency - South Africa - Wed Apr 26, 2006 - Wednesday 26 April 2006

JOHANNESBURG (Reuters) - Africa's top sugar producer Illovo said it has ended talks with France's Tereos about a potential bid, but is continuing talks with another suitor, Associated British Foods.

Illovo said in a statement on Wednesday talks with Tereos collapsed as the parties were unable to agree a number of material issues, including the swap ratios for the transfer of Tereos's sugar assets to Illovo.

Illovo said AB Food's proposal may result in a partial offer for Illovo and an announcement on this would be issued soon.

The separate proposals by Tereos and ABF aimed to purchase a majority, but not all, of the shares of the company.

The two suitors had yet to submit firm takeover bids by mid-April, and Illovo had therefore not yet given a recommendation to shareholders about which offer it preferred.

AB Foods had proposed offering cash for 51 percent of Illovo shares, but had not given any indication of price.

Tereos, France's biggest sugar producer, proposed grouping together its sugar assets in Brazil and Mozambique with Illovo in exchange for new Illovo shares, then topping up its stake to at least 51 percent with a partial offer to shareholders.

Tereos had also not revealed how much it would pay.

"I think the concept of bringing together the best sugar assets in Africa and Brazil to form a global sugar cane champion made a lot of sense. However, the parties could not reach agreement due to the complexities of a transaction of this nature," Tereos President Phillipe Duval said in a separate statement.

Shares in Illovo did not immediately react to the statement on the collapsed talks with Tereos, trading 0.57 percent weaker at 17.40 rand, underperforming a 0.77 percent rise in the midcap index by 1058 GMT.

Illovo has operations in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique, and has said that EU sugar reform will help it boost exports to Europe.