CSR Limited has said they still intend to proceed with their demerger following meetings with China’s Bright Food about a possible takeover of their sugar and renewable energy business.

The company, which is due to complete a demerger of their sugar and renewable energy division in the coming months, said that the talks with Bright only led to the Shanghai-based group “essentially restating its previous highly conditional, non-binding expression of interest”.

“CSR believes that the approach from Bright Food is indicative of a developing broader appreciation of the potential value of its Sugar and Renewable Energy business created as a result of its demerger proposal,” the company told investors in a statement. “To avoid compromising the value creation potential of the demerger proposal and in light of the advanced state of the demerger process, the CSR Board is only willing to progress any transactions alternative to the demerger if such transactions have a sufficiently high degree of certainty as to value, timing and likelihood of completion.

“On previous occasions, and again recently, CSR has advised Bright Food that, in order to engage in further discussions or due diligence, CSR must be satisfied that Bright Food could present a proposal ahead of the demerger shareholder vote that is sufficiently certain and clearly superior to the demerger in terms of shareholder value. Bright Food has not provided such assurance, despite having had access to significant information and several months to present such a proposal.”

As a result, the ASX-listed company has informed their suitor of their intention to go through with their demerger plans in the absence of a new offer.

“CSR notes that the implementation of the demerger will not preclude Bright Food from approaching Sucrogen* in the future,” the firm added.

* Sucrogen is to be the name of their sugar and renewable energy group after the demerger is complete.

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