Shanghai municipal government-owned food producer Bright Food Group Co has today sweetened its offer for Sucrogen, the sugar and renewable energy business of Australia's CSR Ltd from A$1.5 billion to A$1.75 billion, which has made the board of CSR to mull opening its books to the Chinese food company.

Sydney-based CSR, a major building materials manufacturer with large sugar business and investments in aluminium, with operations throughout Australia, New Zealand and Asia, said today that it has received a conditional offer from Bright Food to acquire Sucrogen.

In January 2010, Bright Food's, which produces sweets, dairy, sugar and meat goods, and operates supermarkets and other retail outlets had made an offer to acquire Sucrogen from CSR for A$1.5 billion. (See: China's Bright Foods bids $1.4 billion for CSR's sugar business) 

CSR had rejected the bidthe same month, saying the bid was too low to allow it to conduct due diligence and instead planned to go ahead with its spinning off Sucrogen as a separate unit and list it in the Australian stock exchange.

In June 2009, CSR announced its intention to split into two companies, with one holding its sugar and energy businesses - to be dubbed Sucrogen - while the other will contain its building products operations.

It also raised $375 million in capital to help cover write-downs from its glass business Viridian and to lower the company's debt to under $1 billion from $1.2 billion.

But an Australian court blocked the listing saying that a trimmed down company may not be able to meet the pending asbestos case against the group in future. CSR has since filed an appeal against that order and a ruling is expected this month.

Today Bright Food's sweetened its offer for Sucrogen to $1.75 billion including assuming debt of about $300 million.

Shanghai-based Bright Food describes itself as a ''large conglomerate'' in China's food industry, with annual revenues of 45 billion yuan ($7.1 billion) in 2006 - the same year it was founded, according to the company's website.

CSR said in a statement today, ''The offer remains subject to a number of conditions including completion of due diligence, regulatory approvals and execution of transaction documentation. Accordingly, there is no certainty that any transaction will be completed with Bright Food.''

It added that it intends to enter into discussions with Bright Food to explore this proposal further, while it continues to progress other options for the separation of its two operating businesses.