demerger is better

As an ordinary shareholder, I believe the demerger (rather than a pre-demerger trade sale) of the sugar business may maximise the chances for shareholders to create extra value for their existing holdings in CSR.

If and when any regulatory hurdles are overcome, the separated sugar business could present an appealing business proposition in rising markets for any potential buyers. The stand-alone sugar operation could also provide a prospective entrant with a solid platform for consolidation and growth in the industry. Upon demerger, a purchaser of the sugar business would presumably have to buy the shares from shareholders in the newly-formed company, Sucrogen (management says Sucrogen shares will be issued to existing CSR shareholders upon demerger). In contrast, a trade sale (without demerger) of the sugar business would not necessarily guarantee that existing CSR shareholders get any of the proceeds.

Even if no buyers emerge in the short-term, there appears currently to be favourable long-term environmental trends for all units (ie sugar, renewables and fertilisers) of the split operation. These trends could be positive forces for the share price of Sucrogen (if the demerger occurs).



Disclaimer
Please note that I am not providing advice or information. The above statements are merely my own comments and beliefs as an ordinary shareholder without possessing any special skills or knowledge.
I absolutely disclaim any responsibility or liability whatsoever for any consequences arising from the use of my comments and beliefs above.
If you require advice or information you should seek the services of an appropriately qualified independent expert professional person as well as do your own research.