SunRice has welcomed Spanish company Ebro Foods’s bid to buy Ricegrowers for $602 million.
Ebro Foods, said yesterday it was in talks to buy Australia’s dominant rice processor and marketer, Ricegrowers Ltd, for around 425 million euros ($A602.92 million).
SunRice chairman Gerry Lawson said a shared history stretching back 50 years gave his board confidence in Ebro’s capability and commitment.
“(The offer) addresses SunRice’s structural constraints on capital raising and the concerns of SunRice and its shareholders that the underlying value of the business is not adequately reflected in its share price,” he told The Australian newspaper.
Ebro said in a statement late that if Ricegrowers, which trades as SunRice, agrees to its offer, the transaction could be completed in March 2011.
“The acquisition will be subject to the approval of SunRice shareholders and the Australian courts,” it said.
Buying SunRice would give Ebro, the world’s largest rice products company and the second largest pasta products producer, a jumping off point into the Asia-Pacific region.
SunRice sells around 500,000 tonnes of rice per year and has leading positions in its main markets, including New Zealand, the Pacific Islands, Hong Kong, Singapore and the Middle East.
It controls brands such as Riviana, Sunwhite, Sunbrown, Sunlong, Calrose and Mahatma, as well as the Always Fresh label.
Shares in Ebro Foods, closed up 6.67 per cent at a yearly high of 15.68 euros, making it the biggest gainer of the benchmark Ibex-35 stock index which closed down 0.04 per cent.