| NEW YORK (Dow Jones)--Palm Beach-based sugar company Florida
Crystals Corp. is in negotiations to acquire Domino Sugar
refinery, a unit of U.K.'s Tate & Lyle PLC (U.TAT),
sources told Dow Jones Newswires.
No formal proposal has been made by Florida Crystals yet,
those sources said.
Florida Crystals, a subsidiary of Sun-Flo Inc., is wholly
owned by the Fanjul family.
A spokesman for Tate & Lyle in London told Dow Jones
Newswires Friday the company hasn't made a decision on its
beleaguered U.S. subsidiary.
"We're contemplating all options for that
business," said Mark Robinson, director of investor
relations for Tate & Lyle in London. "And that
includes a sale, merger, joint ventures...we're talking to
different groups," he added, but declined to comment
specifically on the rumors about a possible sale to Florida
Crystals.
Florida Crystals spokesman Jorge Domenicis declined to
comment on a possible purchase of the Tate & Lyle unit.
Florida Crystals has 3,000 employees and operates three
sugar mills, two renewable energy plants, a rice mill and a
packaging distribution center. The company farms 180,000 acres
of land. It produces nearly 750,000 tons of cane sugar a year,
and owns the Okeelanta refinery in Palm Beach, Fla, and holds
50% of Refined Sugars in Yonkers, N.Y.
Robinson said that the settlement of an 18-month strike by
Domino workers in New York, which ended earlier this month,
cleared the way to move faster on a decision about the
refinery's future.
Rumors that Florida Crystals and Imperial Sugar Co. (IPRL)
- the nation's largest sugar refiner - were interested in
Domino's operations have been going around for months.
But Imperial Sugar is said by sources to have backpedaled
from any deal after filing for Chapter 11 bankruptcy
protection earlier this year. Robinson declined to comment on
this. Imperial Sugar had no comment on the matter.
The sources aware of Florida Crystal's interest in the Tate
& Lyle unit didn't know of any price discussed.
Tate & Lyle's spokesman Robinson said the company's
U.S. sugar assets are valued at GBP300 million.
Tate & Lyle bought Domino in 1988, paying $305 million,
but sources said that whoever buys Domino isn't likely to pay
that much, given the current conditions in the domestic
industry, where many refineries have shut down recently amid
high domestic raw sugar prices that makes investments in the
sector unappealing.
If the Fanjuls do end up buying Domino, that would put the
group as the third largest player in the U.S., behind Imperial
Sugar and the Red River Valley Sugarbeet Growers Association.
Sale of Western Sugar Co. Near Completion
Tate & Lyle is also close to completing the sale of its
wholly-owned Western Sugar Co. to a group of U.S. growers. The
Rocky Mountain Sugar Growers Association has already sent Tate
& Lyle a definitive stock purchase agreement for Western
Sugar.
Admitting that the sale to growers had been a long process,
spokesman Robinson said the negotiations continue and that a
completion is expected in the near term.
According to one of the lawyers handling the transaction
for the growers, the purchase price is $78 million, which
includes six sugar beet factories: two located in Colorado,
two in Nebraska, one in Wyoming and one in Montana.
In its latest company results, Tate & Lyle confirmed
earlier statements that its top priority was to find a
solution to its ailing U.S. operations. The group said the
focus is now shifting toward higher margin, value-added
products, while efforts are being made to dispose of
underperforming assets.
The company said in November its first half-year pretax
profit before items fell to GBP68 million from GBP127 million.
Sales for the 27 weeks ended Sept. 30, 2000 slipped to GBP2.12
billion from GBP2.13 billion. |