Fri, May 30, 2008 - Page 9 News List

Sweet intentions leave workers stranded

US Sugar management is accused of taking advantage of a well-meaning federal initiative to cut its workers out of deals in which they had a crucial stake

By Mary Williams Walsh  /  NY TIMES NEWS SERVICE , CLEWISTON, FLORIDA

TWO OFFERS

The reported declines in the stock price might not have been questioned had it not been for two offers to acquire US Sugar, one in the summer of 2005 and the other early last year.

Both were made by the Lawrence Group, a large father-son agribusiness and banking concern based in Sikeston, Missouri, for US$293 a share in cash. Gaylon Lawrence Jr confirmed the price but declined to comment further.

The worker-shareholders were being paid US$205 to US$194 a share at the time, based on ESOP appraisals.

But to help vet the Lawrence Group’s offer, US Sugar hired a second appraisal firm to calculate the company’s break-up value. This appraiser concluded the company was worth US$2.5 billion, or about US$1,273 a share (the exact number of shares outstanding is not public information).

US Sugar then rejected the Lawrence Group’s offer as inadequate.

McCorvey said he would have tendered his shares to the Lawrence Group without a moment’s hesitation.

“But we were never given the opportunity,” he said.

John Logue, an ESOP specialist at Kent State University, said federal law does not require worker-owners to vote on acquisition offers.

But he said the plans’ trustees are required to protect participants’ interests, and that means getting the maximum value for workers’ shares.

“When you’re in doubt, let the participants vote,” he said. “We have kind of an innate sense in the United States that people are entitled to do what they want with the property they own.”

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