CSR has rejected an offer by China's Bright Food of up to Aus$1.5bn (US$1.4bn) for its sugar division, dismissing the bid as "highly conditional" and "non-binding".

The Australian building products-to-energy conglomerate said it was committed to plans to demerge its 150-year-old sugar division as Sucrogen by the end of March, and would discuss alternatives only if they had a "a sufficiently high degree of certainty as to value, timing and likelihood of completion".

"Bright Food has not provided such assurance, despite having had access to significant information and several months to present such a proposal," CSR said, adding that the Shanghai-based food and consumer products group could yet approach Sucrogen as an independent company.

The statement followed talks last week between CSR and Bright Foods, whose bid was revealed two weeks ago.

Consolidation wave 

The rejection was viewed with little surprise by analysts, who said that CSR could obtain a higher price for Sucrogen, especially in an environment of sector consolidation catalysed by high sugar market.

In Australia, Maryborough Sugar is attempting to buy rival miller Tully Sugar, while America's Bunge last month unveiled Brazilian sugar acquisitions of up to $1.5bn, and last year the UK's Associated British Foods last year bought Spanish-based Azucarera Ebro.

CSR said: "The approach from Bright Food is indicative of a developing broader appreciation of the potential value of [Sucrogen]."

The move by state-owned Bright Foods also comes amid a backlash over China's tightening grip on the global commodities trade, with the Australian government blocking some offers for mining assets and setting strict conditions on others.

Furthermore, China's credibility as a bidder has been dented in Australia by a last-minute attempt by state-owned Sinochem to cut a bid for agrichemicals group Nufarm, which instead opted for a tie-up with Japan's Sumitomo Chemical.

CSR shares closed down 2.4% at Aus$1.87 in Sydney.