By: T’wana Skelton 
 

Lawrence Group offer
 
Lawrence group to seek out shareholders in 3rd offer

The Mott Children’s Health Center, in a separate offer, are being heavily
pursued by Tennessee farming company, the Lawrence Group, to purchase US Sugar
land and assets. In a letter to the shareholders sent in November, representatives from
the Lawrence Group promised to pay $300 per share, in cash, to shareholders. Photo credited to the Associated Press at
http://www.winknews.com/news/local/348
23269.html
The Mott Children’s Health Center which owns about 425,000 of US Sugar
stocks will acquire $125 million in cash if this offer were accepted.

The company plans on keeping US Sugar in business. They claim the offer
        
will also enable the South Florida Water Management District to meet their objective
 
of protecting the Everglades. They have met with the South Florida Water
Management District and said they are committed to selling them the land they require
at a much lower cost than the current offer between the state and US Sugar.

The company made two previous offers of $293 per share in 2005 and 2007
which US Sugar representatives turned down.

The Lawrence Group took their offer straight to the shareholders this time. A
confidentiality agreement between US Sugar Corp. and the Lawrence Group in the
previous offers prevented them from doing this.

 
 

 
 

November 19, 2008

 
To: Chairman White and the Board of Directors of U.S. Sugar Corporation,
Today, the Lawrence Group announced a proposal to acquire all of the shares of U.S. Sugar
for $300 per share in cash. We believe that this offer provides a clear premium to the value U.S.
Sugar shareholders would receive under the current proposed transaction being pursued with the
State of Florida. Further, while we are confident that you will determine this offer to be in the best
interest of your shareholders and thus immediately enter into discussions with the Lawrence Group
to negotiate a transaction for the benefit of all shareholders, we also want to let you know that we
are preparing to take our offer directly to the U.S. Sugar shareholders.

We believe that the current proposed transaction with the South Florida Water Management
District would be devastating for U.S. Sugar, its employees, their families, and all the residents of the
communities south of Lake Okeechobee. It is quite clear that Lake Okeechobee’s local economy is
very dependent upon U.S. Sugar, and the current proposal would result in the eventual loss of 1,700
jobs when U.S. Sugar shuts down in 2016. These employees have few, if any, other employment
opportunities in the area, and the corresponding economic damage in the region will spiral
downward into reduced property values and a lower tax base, resulting in an impoverished
community. What will be left is an area that is desperate and impoverished by the major employer,
U.S. Sugar, shutting down, just as Flint, Michigan has been devastated by the loss of General Motors
jobs. The Lake Okeechobee region is going to face upon the closure of U.S. Sugar: skyrocketing
unemployment, plummeting property values, an escalating crime rate, a flood of local businesses in
bankruptcy, and a decline in the quality of local of school programs caused by a reduced educational
budget, to name a few. We cannot imagine that you would not want to pursue an option that would
prevent this from happening (moreover, an option that delivers superior value to your shareholders).
Our proposed transaction will be structured so as to avoid these unfortunate consequences,
as we would continue to operate U.S. Sugar as an ongoing business. Further, our proposal would
enable the South Florida Water Management District to meet their objective of protecting the
Everglades, which we agree is of significant environmental importance. In this regard, we have met
with them and we are committed to selling them the land they require at a much lower cost than
your transaction.
 

We believe that our proposal would deliver to shareholders $300 per share in cash with none
of the contingency risks outlined in the recent memorandum from Bob Buker, a copy of which is
attached hereto. We understand the Buker/South Florida Water Management District transaction to
require that:
(i) a meaningful portion of the $1.3 billion proceeds being used to pay corporate income
taxes on the transaction and repay the company's indebtedness;
(ii) only a fraction of the amount of cash will be paid to U.S. Sugar's shareholders in
2009 (which we believe is the only guaranteed cash payment in the transaction and surely
a [significant] amount less than the $300 per share that we are offering) following the
uses described in (i) above; and
(iii) the remainder of the shareholder’s ultimate $365 price will come during the next 8
years or more, from continued operations under current management, followed by the
liquidation of whatever is left in the company in 2016 (or at such later date when the
wind down could be finished).
Even if the $365 is ultimately realized (which we do not think would happen) the time and
risk of the recovery of the amount through 2016, makes our offer of $300 in cash now more
favorable.
The contrast between the certainty of value provided by the transaction we are proposing
and the "value" uncertainty in the Buker/South Florida Water Management District transaction is
stark; particularly considering the risks underlying the "value" promised by the next 8 years of
operations – for example, the potentially significant costs brought on by future hurricanes (noting as
a reference the large costs from hurricanes reported in the company's recent annual reports), the
sensitivity of the business to the price of sugar and the diminished value of the Company's operating
assets at the end of 8 years. The hard truth is that U.S. Sugar’s existing management is not currently
producing the earnings that could support the ultimate per share value contemplated in Buker’s
memorandum.
You have already made the decision to sell; that is irrefutable. What remains is the Board’s
fiduciary responsibility of assuring that the shareholders receive the best possible value for their
shares. Twice in the past three years, you rejected our offers; you also made the decision not to
communicate our previous offers [of $293 per share] to your shareholders. The fact that we were
under a confidentiality agreement prevented us from contacting shareholders directly at that time,
 

however, we are no longer under any such constraints and are communicating this proposal publicly
to assure that all shareholders are aware of the exceptional financial opportunity available to them.
We believe strongly that any legitimate evaluation of our $300 cash offer will demonstrate
the certainty and superiority of our offer compared with the current proposed transaction outlined
in Buker’s memorandum. Our offer would provide shareholders with $300 in cash per share
immediately, which if you invested in a portfolio of investment grade bonds, you would have well
over $500 in 2016.
Our offer is a win for everyone: the employees, the local communities, the environment, the
taxpayers, and particularly your shareholders. What possible reason could you have to not accept
our offer?
We look forward to working with you in accomplishing our acquisition of U.S. Sugar.
As is consistent with all other communications we are making in this transaction, this letter
will be made public to assure that our actions are transparent to all those who have an interest in this
transaction.

Sincerely yours,

Gaylon Lawrence Jr.

cc: U.S. Sugar Corporation Board of Directors 
 
 

 
 
 
 
November 19, 2008

To: The Board of Governors of the South Florida Water Management District and Executive
Director:

My name is Gaylon Lawrence Jr., and together with my father Gaylon Lawrence Sr., we do business
as The Lawrence Group. Today we are proposing to acquire all of the shares of U.S. Sugar for $300
per share in cash. We are hopeful that the Board of U.S. Sugar will determine that our offer is in the
best interests of U.S. Sugar's shareholders and immediately enter into discussions with us to
negotiate a transaction for the benefit of all shareholders; however, we also want to let you know
that we are preparing to take our offer directly to the U.S. Sugar shareholders in the coming weeks.
Our offer is purely a business decision made within the normal process of analyzing an acquisition
candidate. U.S. Sugar’s assets and businesses fit well with our current operations, which include
farmland and citrus groves that already make us one of the largest owners of agricultural properties
in the United States.

Although this decision was made for business reasons, we understand and respect the broader
spectrum of issues surrounding U.S. Sugar and the Everglades restoration project. Recently, we met
with SFWMD staff to discuss cooperative solutions to restoring the flow between Lake Okeechobee
and the Everglades. Our offer contemplates selling you the land needed to accomplish this worthy
undertaking at a huge savings to the taxpayers when compared to the current U.S. Sugar proposal.
From a human perspective, we currently plan to continue operating U.S. Sugar for decades to come.
This will ensure jobs and contribute to the economic vitality of the communities located in and
around the agricultural area south of Lake Okeechobee. Our proposal removes the cloud of
uncertainty regarding U.S. Sugar’s future and the potential significant job losses that could occur
after the land was to be transferred to the state.
 

Already, home values have dropped precipitously in the communities south of Lake Okeechobee,
something that is certain to worsen. It will not become a question of what a home sells for, but
whether it can be sold at all! The extension of that issue is the destruction of the local tax base. City
and county governments already struggling with difficult budget issues will be faced with an
impossible task of providing essential governmental services. Our offer not only addresses that
problem, but also solves it.

We believe that our proposal will enable you to accomplish your goals and would also be much less
expensive for you to implement.
The reality is that people deserve consideration. It is important to note that farmers in the area
south of Lake Okeechobee have done an excellent job working with the South Florida Water
Management District to accomplish environmental goals and contribute towards Everglades
restoration.

People and the environment can live side-by-side as long as all parties recognize their
responsibilities. As owners and operators of large farming operations, we well understand the
importance of environmental issues associated with farming. May I assure you that you will find us
to be responsible landowners and farmers who are willing to cooperate in every way possible with all
parties interested in protecting the Everglades.

This is not the first time we have made an offer for U.S. Sugar. Twice before, in 2005 and 2007, we
made offers to acquire the company. Our interest is exactly the same now as it was then—farming
the land profitably and responsibly. We have the resources to accomplish this transaction and are
ready to move forward as quickly as possible.
 

This deal is a ‘win-win’ for everyone, including the shareholders, employees, surrounding
communities and citizens of Florida, and is superior to the one being discussed with the State on
several fronts. First, under our proposal, U.S. Sugar shareholders will receive a generous cash offer
for their shares; second, we fully intend to preserve jobs and invest in the company for years to
come; and lastly, we are committed to work closely with your staff to make available the acreage
needed to restore the flow of water between Lake Okeechobee and the Everglades.

We look forward to sitting down with you and staff to help create a restoration project we can all be
proud of. Should you have any questions for me, feel free to email me at
thelawrencegrp@gmail.com.
Sincerely,

Gaylon Lawrence Jr.

Cc: South Florida Water Management District Board of Governors and Carol Ann Wehle,
Executive Director
 

November 19, 2008

To the Board of Directors of the Mott Children’s Health Center, Flint Michigan:

My name is Gaylon Lawrence Jr., and together with my father Gaylon Lawrence Sr., we do
business as The Lawrence Group. Today we are proposing to acquire all of the shares of U.S. Sugar
for $300 per share in cash. We are hopeful that the Board of U.S. Sugar will determine that our offer
is in the best interests of U.S. Sugar's shareholders and immediately enter into discussions with us to
negotiate a transaction for the benefit of all shareholders; however, we also want to let you know
that we are preparing to take our offer directly to the U.S. Sugar shareholders in the coming weeks.

It is my understanding that you are the owner of more than 425,000 shares of U.S. Sugar stock,
which means that, under our proposal, you would receive more than $125 million in cash at the
closing of the transaction (which we believe could be accomplished in a matter of months). It is
also my understanding that the cost of providing for more than 25,000 underprivileged children
in Flint and Genesee County, Michigan is well beyond your current financial capability.

We understand from your publicly available filings that substantially all of your assets are
represented by securities holdings and a substantial part of these investments are U.S. Sugar
holdings. Depending upon the value of U.S. Sugar, it represents at least 20% of your
investments and, perhaps, as much as 40%. The retention of an undiversified, illiquid and
underperforming asset is not prudent for an exempt charitable organization such as the
Children’s Health Center. With an asset base of almost $250 million, the program expenditures
of only $10 million would appear inadequate. Were the Children’s Health Center to accept our
offer, which we believe is the only prudent thing to do, the $125 million received would support
a major enhancement of its charitable programs. In the current difficult economic environment
-- one with special challenges for nonprofits in the health care sector -- we do not believe there
can be any justification for not accepting our offer.
 

We believe our offer is outstanding for every shareholder, but particularly outstanding for the
Mott Children’s Health Center, since you have such a high percentage of your investable assets
in U.S. Sugar stock, which has been declining in value, has ceased to pay dividends and its
underlying business is no longer profitable. But most importantly, a stock for which you have
never had an opportunity to sell to anyone—other than The Lawrence Group.

In 2005, we made an offer to acquire U.S. Sugar for $293 per share. We believe that offer
was never communicated to you. Management of the company required The Lawrence Group to
sign an agreement at that time not to communicate the offer to you or the employees.

In January 2007, we made our offer of $293 per share again. Once more, that offer was
rejected by management of U.S. Sugar, and once more we believe it was not communicated to you
or any of the other shareholders, and certainly not to the employee shareholders who own the
largest block of company stock. The same agreement management required us to sign in connection
with the 2005 offer prevented us from communicating this offer to you or the employee
shareholders.

We are now making an offer again for the third time to acquire U.S. Sugar, but this time we
are not bound by any agreement that prevented us from contacting you directly. We are making this
offer publicly, and we are even making this letter available to the public to ensure that this time there
are no attempts to deny you or any other shareholder the right that is yours and yours alone.

Under the direction of the Board of Directors, the company announced in June that it had
reached an agreement with the Governor of Florida to sell 100% of the assets to the South Florida
Water Management District for $1.75 billion. Public outcry over the price and subsequent appraisals
demonstrated that the company was worth nowhere near that amount. The deal was described as a
bailout of U.S. Sugar. Last week the company and Governor Crist announced a scaled-down
version of that June deal, which would sell only the land assets of the company to the state for $1.34
billion. Again, there was a public outcry over the purchase. You should know that in both events,
there was never a binding contract signed for sale by either party.
 

You should also know that as a shareholder, the sales price of the assets are not what you
will receive as a shareholder, which is of ultimate importance to you. The truth of the matter, as
born out in the attached document from the Chief Executive Officer of U.S. Sugar, Robert Buker, is
that under this scaled-down deal, our financial experts agree that you will receive only a small
fraction of the ultimate $365 price in 2009. That is due to the huge amount of debt the company
owes which must be repaid, and the large amount of taxes that will be required to be paid from the
sale of the land. The company has announced that shareholders would receive $365 over a seven-
year period from the earnings of the company over these seven years and from the sale of
equipment left over at the end. Distressed sales of old equipment never bring much money, but
management is claiming in their projections that they will receive top dollar for those assets in order
to reach their $365 per share. What the memorandum to employees failed to specify is that
shareholders would only be receiving a small amount upon the sale to the State. The balance over
the small upfront payment is entirely dependent upon the financial performance of the company
over the next several years and the ability at the end of that period to receive a huge price for the
sale of assets, which by any knowledgeable person, will be worth very little.

We believe strongly that any legitimate evaluation of our $300 cash offer will demonstrate the
certainty and superiority of our offer compared with the current proposed transaction outlined
in Buker’s memorandum. Our offer would provide shareholders with $300 in cash per share
immediately, which if you invested in a portfolio of investment grade bonds, you would have
well over $500 in 2016.

The choice here for you is simple. Do you want $300 per share (or $125 million in the
aggregate) in cash now—that’s how simple and straightforward our offer is—or do you want to rely
on the promise of a management that is losing money and producing a steady decline in share value
to produce a "value" that is subject to significant risks over the next 8 years – for example, the
potentially significant costs brought on by future hurricanes (noting as a reference the large costs
from hurricanes reported in the company's recent annual reports), the sensitivity of the business to
the price of sugar and the diminished value of the company's operating assets at the end of 8 years.
Just remember that when the Bryant Sugar mill was sold upon the construction of the new mill, the
company received only $5 million for the Bryant mill that was recognized as one of the most
 

efficient in the world. A sugar mill without a cane supply is worth pennies on the dollar.
Tractors and trucks and farm equipment must be replaced every few years. The value of those
assets seven years from now will be tiny.

You should also know at the end of the seven-year period in 2016, the company will have no
cane supply. With the land sold to the South Florida Water Management taken out of production,
there is no way the sugar operation can continue. There is just not enough suitable land available to
run an economically viable operation.

But don’t take our word for this. Hire an independent and objective financial advisor as
your duty requires. Hire independent and objective legal counsel to assess your situation. Do your
duty for those whose fiduciary obligation you are bound to protect. That duty is solely for the
children of Flint, Michigan and Genesee County, Michigan.
Besides the clear financial benefit you will receive in the sale of your stock to The Lawrence
Group for the children of Flint, you should know that in our offer, the thousands of residents of the
farming area south of Lake Okeechobee dependent upon the sugar industry for their personal and
public economic survival will continue to have jobs, their home values won’t be destroyed and
neither will the tax base that provides schools, police, fire protection, roads and hospital care. It is
particularly ironic that the decision you have to make regarding our offer could have the same
economic impact on the Glades communities as what happened in Flint during the General Motors
layoffs. Just as General Motors has a significant economic impact on Michigan’s economy, so too
does U.S. Sugar on communities within the agricultural area south of Lake Okeechobee.

You should also know that from an environmental standpoint, we fully support the State of
Florida’s efforts to restore the waterflow from Lake Okeechobee to the Everglades. We are
committed to selling the South Florida Water Management District the land they require at a
much lower cost than is currently being considered. We have already begun talking with the
South Florida Water Management District to show how we can be part of the solution in
helping with their environmental goals. We are confident we can make this work for the State
and offer major savings for taxpayers.
 

Our offer is a win-win for everyone—the shareholders, the employees of U.S. Sugar, their
families, their communities, the environment, the taxpayers of Florida and as important as any of
those, the thousands of poor children of Flint and Genesee County, Michigan who are reliant
upon the proper execution of your fiduciary duty for health care.

This is an easy and obvious decision. Hire an independent financial advisor. Hire an
independent legal counsel. And receive more than $125 million in cash at a time when we know you
couldn’t need it more.

If you have questions, please send me an email at thelawrencegrp@gmail.com and we will

promptly answer your questions.

Sincerely,

Gaylon Lawrence Jr.

Cc: Board of Directors of the Mott Children’s Health Center