U.S. Sugar's 'poison pill' clause blocks takeovers

In a maneuver seemingly aimed at an unsolicited Tennessee suitor, U.S. Sugar moved to block hostile takeovers while negotiating a state contract to use its acres to clean Everglades water.

The boardroom and backroom drama continues to churn behind Gov. Charlie Crist's $1.34 billion land deal with the U.S. Sugar Corp.

The sugar giant's board of directors, controlled by foundations and the descendants of its founder, adopted a ''poison pill'' provision on Monday intended to protect its financial interests and block hostile takeovers.

''I wouldn't use that phrase, but there are others who may look at this and come to the same conclusion,'' said Robert Coker, a senior vice president for U.S. Sugar.

Those others certainly included the Lawrence Group, a Tennessee-based concern that contends it can strike a cheaper Everglades restoration deal with the state.

The U.S. Sugar maneuver, which would dilute the value of any hostile bidders' shares, is a major hurdle to the company's most persistent suitor.

'It's part of a continuous effort by U.S. Sugar management to frustrate my clients' effort to make sure that shareholders get the best value,'' said Ron Book, The Lawrence Group's lobbyist.

U.S. Sugar's ''shareholder rights plan'' would work this way: Once a bidder acquired 15 percent of shares, the board could trigger an ''exchange'' that would double remaining shares and allow the board to retain majority control.

The impact on the landmark Everglades land buy is uncertain, at least so far.

But the move is aimed at keeping the company in the hands of directors who signed off on the state deal.

NOT PUBLICLY TRADED

U.S. Sugar employees and retirees own shares, which are not publicly traded, but the majority are controlled by foundations and relatives of Charles Stewart Mott, who made a fortune in the auto industry and bought the sugar grower in the 1920s.

Still, Coker said, there is a possibility of a competing bidder offering a better deal, which the state would have the right to match.

Coker said the company is simultaneously finalizing the state contract and negotiating with several private interests, including rival Florida Crystals, for all or parts of its sprawling empire.

BILLION-DOLLAR DEAL

If the deal survives, water managers plan to use much of U.S. Sugar's 180,000 acres for projects to store and clean water for the Everglades -- after leasing it back to the company for seven years or more.

The Lawrence Group, twice before blocked in takeover bids, had made no secret of intentions to make offers to smaller shareholders.

U.S. Sugar's board has not accepted its latest bid, $300 a share, as valid.

The Lawrence Group's previous bids sparked a 2007 class-action lawsuit from former employees, alleging that U.S. Sugar's board rejected a purchase offer that would have paid them $293 per share.

At that time, former employees were cashing out at $200.