Offer Worth Estimated $118 Million : Holly Accepts Takeover Bid From Imperial Sugar

Holly Sugar Corp., the third-biggest U.S. sugar-beet processor, Thursday accepted a takeover offer worth an estimated $118 million from Imperial Sugar Co.

Holly had been facing a 5 p.m. Thursday deadline set by Plum Associates, an investor group which had made another, revised takeover offer worth $85 a share or about $95 million.

Analysts said the purchase, equal to $105 a share, would be Imperial’s first involvement in sugar beets. The company is a middle-sized sugar cane refiner with daily output of about 1,650 tons. Amstar, the nation’s largest refiner, processes 9,000 tons daily.

The news sent Holly stock sharply higher. Holly Sugar had been one of the most active shares on Wall Street before the takeover deal was announced and was up $5.50 at $82 a share in late trading.

Holly, based in Colorado Springs, had accepted a $106-million offer from Plum in the fall but then resisted when Plum suggested revising down its bid. Plum said the lower offer better reflected market values after the October crash.

Imperial Sugar’s management was not available for comment.

Holly Sugar said in a statement that it had executed a definitive merger agreement with Imperial Sugar, a privately owned firm in Sugar Land, Tex., under which Imperial will acquire about two-thirds of Holly’s outstanding common stock for $105 in cash per share. The remaining Holly shares will be exchanged for 25% of the common stock of the merged company.

Holly, which had spurned an earlier offer from Imperial, said its merger agreement with Plum Associates has been terminated.

Holly said its board recommended that shareholders withdraw any Holly shares they may have tendered under the Plum offer.

Under Plum’s revised offer, Holly shareholders would have received $85 per share in cash for two-thirds of their holdings. The balance would have been exchanged for a share of preferred stock with an estimated value of $80 and paying a 20% dividend.