Maryborough Sugar Factory has been forced to sweeten its takeover terms for fellow Queensland producer Tully Sugar, offering a cash component to its bid lodged almost seven months ago.
The Australian Financial Review reports that Maryborough is offering $6.75 a share plus 10 Maryborough shares for every one Tully share, valuing the unlisted Tully at $81.1 million.
Maryborough failed to secure support for its earlier 13-for-1 scrip offer. Analysts expect the lure of cash to give its bid greater traction.
"I think this will certainly be seen as attractive for some [Tully] growers," RBS Morgans analyst Belinda Moore said.
Maryborough will spend up to $20.9 million and issue shares worth $60.25 million based on yesterday's closing share price of $1.95.
The combined group would become the fourth-largest sugar company in Australia at a time when sugar prices are rising.
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