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ChemChina Group Offers $2.75 Billion for Nufarm

Reuters
Sunday, 4 Nov 2007 | 8:49 PM ET

Australian farm chemicals group Nufarm said it had agreed a takeover proposal worth up to A$3 billion (US$2.75 billion) from a consortium led by China National Chemical Corp (ChemChina) and including private equity.

If successful, the deal would combine Nufarm with some of ChemChina's agricultural chemical businesses to create the global leader in off-patent crop protection, Nufarm said in a statement on Monday.

Nufarm, the world No.2 supplier of generic farm chemicals behind Israel's Makhteshim Agan Industries, said the ChemChina consortium, which also includes buyout groups Blackstone Group and Fox Paine Management, had offered to pay up to A$17.25 a share plus a 30 cents dividend.

Nufarm's board would recommend shareholders vote in favor of the proposal, subject to there being no superior proposal and subject to an independent expert's report, the company said.

"We acknowledge the consortium's proposal which may lead to a transaction which realizes fair value for Nufarm shareholders," said Chairman Kerry Hoggard.

The proposal was subject to a number of conditions, and there was no certainty it would result in a formal offer, Nufarm said.

Under the proposal, Nufarm's management team would continue to manage the combined operations of Nufarm and ChemChina.

Several other pesticide companies and private equity groups are seen as potential suitors for Nufarm. Analysts have speculated that Makhteshim, also known as MA Industries, and U.S. agrichemicals giant Monsanto, would have the best fit with Nufarm.

Any takeover would need the support of Nufarm's chief executive, Doug Rathbone, who owns 17 percent of the company, and the Goodfellow family in New Zealand, whose affiliates together own about 10 percent of the company.

Nufarm shares last traded at A$15.60 on Wednesday, up 13 percent after a Hong Kong newspaper reported Nufarm had rebuffed an offer of A$17.10 a share from ChemChina subsidiary China National BlueStar and Blackstone. The shares have been on a trading halt since Thursday.

Nufarm is being advised by Goldman Sachs JBWere and Arnold Bloch Leibler.

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