Tate & Lyle Sweetens Bid For Staley; May Have To Go Higher
CHICAGO (AP) _ British sugar producer Tate & Lyle PLC may have to sweeten its $1.42 billion buyout bid for Staley Continental Inc. even further if it hopes to win the Illinois-based corn syrup maker, according to one industry analyst.
Tate & Lyle increased its offer for Staley to $35 a share from $32 a share, or a total of $1.33 billion, on Wednesday.
Staley rose 50 cents to $37 a share Wednesday on the New York Stock Exchange.
Industry analysts had said Tate & Lyle’s initial bid for Staley’s 30.4 million common shares outstanding plus its preferred stock was well below the company’s fair market price, which some estimated could be up to $40 a share.
The new offer ″indicates the seriousness by Tate & Lyle to make a deal with Staley,″ said Clinton Mayer III, an analyst in New York with Bear Stearns Inc. ″The $32 bid was unrealistic. This (new) offer is moving toward realism.″
Staley, based in the Chicago suburb of Rolling Meadows, declined comment on the new offer.
″We haven’t seen anything on it yet. And until we receive something on it, we can’t make any comment,″ Staley spokesman G. David Satterfield said late Wednesday afternoon.
London-based Tate & Lyle, England’s second-largest sugar refiner, initially offered $32 a share for Staley on April 8.
Staley, the United States’ second-largest refiner of corn sweeteners behind Decatur-based Archer-Daniels-Midland Co., urged its stockholders on April 21 to reject Tate & Lyle’s offer but indicated it would consider other takeover bids.
Tate & Lyle, which owns about 5 percent of Staley’s stock, wants to acquire the company for its A.E. Staley Manufacturing Co. subsidiary, which produces corn sweeteners.
Staley was based in Decatur until about three years ago, and the British company has promised to move Staley’s headquarters back there if its acquisition attempt succeeds.
Staley Continental also owns CFS Continental Inc., a leading food-service supplier that it acquired in early 1985.