Australia's Nufarm Confirms Takeover Talks
Australian farm chemicals company Nufarm confirmed it has held talks about a potential takeover of the company and said it had received a letter on Wednesday relating to those discussions.
The comments came the day after its shares soared 15 percent after a Hong Kong newspaper reported China National BlueStar and Blackstone Group were revising a bid for Nufarm after it rejected a US$2.7 billion offer.
Nufarm shares have been placed in a trading halt and the company said it expects to make an announcement on this issue prior to the start of share trading on Monday.
"All prior discussions that Nufarm has had have been highly conditional, incomplete and preliminary in nature," Nufarm said in a statement.
Nufarm, the world's 8th largest crop protection company, said it expects to be able to say more before the start of trading on Monday, Nov. 5.
Nufarm's shares hit a record high of A$16.09 on Wednesday and closed at A$15.60, well below the offer of A$17.10 a share the South China Morning Post said it had rejected from China National BlueStar and Blackstone.
The company has been the subject of takeover speculation since August, when a newspaper reported Australian fertilizer maker Incitec Pivot was talking to Nufarm.
The paper said Israel's Makhteshim Agan Industries and Canadian firm Agrium had also expressed interest.
Incitec Pivot has since turned its sights on explosives maker Dyno Nobel, taking a 13 percent stake and saying late in August it would seek discussions with Dyno's board.
More recently, hot competition in the $2.2 billion sale of Japanese firm Arysta LifeScience, one of the world's largest privately held crop protection companies, sparked talk that Nufarm could be the next target.
Based on the price-earnings multiple of 20 times that private equity group Permira Funds paid for Arysta, analysts said Nufarm would be worth at least A$17.50 a share.