Tate & Lyle's recovering shares closed at their highest for three months after Credit Suisse analysts upgraded the stock in a note urging the group to sell its iconic £200m UK sugar business.

Tate shares ended at 455.50p, their best close since late November. The stock has recovered 17% since late January, when the group's assurances that the market for high fructose corn syrup was weak rather than dismal helped settle investor nerves.

Friday's 3.0% jump was helped by a note from Credit Suisse analysts which suggested further rises were in store, raising to "outperform" from "neutral" their rating on the shares, with a price target of 525p.

HFCS concerns 

The bank's analysis was based on Tate's strong dividend yield; its fresh management team headed by new chief executive Javed Ahmed; and the opening up of Mexico to imports of high fructose corn syrup, which would offset weakness in the US market.

The sweetener has been ditched by some drinks makers over health concerns, which the industry refutes.

"A new management team is quickly getting to grips with the cash flow, at least, and in due course the business," Credit Suisse said.

With Tate trading on an "undemanding" multiple of 11 times estimated 2011 earnings, "this looks a good time to return to our positive view."

'All round good news' 

With the high fructose corn syrup issue apparently under control, Mr Ahmed should make his priority reviewing Tate's sugar business, the note said.

The division, which sells under the Silver Spoon brand, was about to lose annual aid of E20m from Brussels under a scheme to shield Europe's sugar industry from the impact of market reforms.

"Ex this the business is barely breaking even, we believe."

Furthermore, there were "serious questions" about its ability to source sugar to meet its annual need of 1.3m tonnes.

"Add all this up, plus a new chief executive taking a fresh look at the business, and surely now is the time to consider exiting the business?" Credit Suisse said.

"This could be all round good news."

Icap analysts in January also said that Tate should consider selling its sugar business, suggesting Germany's Sudzucker or Nordsucker, or UK-based Associated British Foods, as potential buyers.