Ebro's Failed Acquisition Of SunRice Disappointing For Both Parties

Spain's largest food group Ebro Foods' acquisition of Australia-based rice producer SunRice has fallen through after the Spanish food producer failed to garner sufficient votes from SunRice's farmer shareholders for the approval of its takeover. Despite its failure to acquire SunRice and given its considerable cash pile, we believe Ebro will remain on the hunt for desirable assets, particularly in Asia, given its relatively weak exposure in the region. For SunRice, a failure to secure the much-needed capital injection will probably prove very tricky for the debt-ridden company, although the strong recovery of production in rice in 2011 is likely to provide some reprieve to the company's fiscal health.

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