Nufarm, pursued by Sinochem, teams with Sumitomo

Nufarm, pursued by Sinochem, finds cornerstone investor in Sumitomo Chemical

Dec. 29 (BusinessWire) – Nufarm Ltd., the Australasian farm chemical company being pursued by China’s Sinochem Corp., said Japan’s Sumitomo Chemical Co. has agreed to buy a 20% stake in the company at a superior price.

Sumitomo plans to acquire a fifth of Nufarm via a tender offer to shareholders at A$14 a share. The offer eclipses Sinochem’s proposal, which was trimmed back to A$12 apiece from A$13 last week.

“Sumitomo’s proposal places an appropriate value on the company and provides all Nufarm shareholders with the opportunity to realize a fair price for some of their shares,” Nufarm chairman Kerry Hoggard said in a statement. The two companies will also cooperate on some business lines in a strategic relationship that are expected to “deliver meaningful benefits” to Nufarm.

Sumitomo’s crop protection business, which has annual sales of about US$1.3 billion, is complementary to Nufarm’s, with more than 40% derived from insecticides.

Shares of Nufarm climbed 3.7% to A$10.95 on the ASX today, giving the company a market value of A$2.3 billion. They have gained 12% in the past 12 months.

On completion of the tender offer, Nufarm plans to raise A$250 million via a renounceable entitlement offer to shareholders. The offer will be fully underwritten by UBS AG.

“Our balance sheet is expected to be in a strong position at year end, allowing us to pursue growth opportunities and to continue to support the ongoing needs of the business,” managing director Doug Rathbone said.

(BusinessWire)

© Scoop Media