Nufarm dumps Sinochem's offer, accepts Sumitomo investment

Nufarm Ltd, Australia's largest agricultural chemical manufacturer, has rejected a revised lower takeover offer of $2.3 billion from China's state-owned Sinochem Corporation and agreed to Japanese conglomerate Sumitomo's offer to acquire 20 per cent of the company at a better price.

The board of the Melbourne-based Nufarm rejected the revised cash offer of $12.00 a share by China's fourth largest oil company as it undervalued the company and said the revised offer was materially lower than the price of $13.00 cash per share that it had agreed to pay earlier.

Tokyo-based Sumitomo Chemical, the world's ninth-biggest agricultural chemicals company, has proposed to acquire 20 per cent shares of Nufarm for $14.00 cash per share via a tender offer. It also proposed to enter into an agreement with Nufarm to co-operate across a number of business areas, including research and development and co-distribution.

Sumitomo will get to nominate one director to the board of Nufarm and Nufarm said this investment is expected to provide it with access to additional new products and increased opportunities to expand and strengthen its position in various crop segments and geographic markets.
Sumitomo said it has already received approval from Australia's Foreign Investment Review Board for the investment in Nufarm.

Following completion of the proposed investment offer from Sumitomo, Nufarm will undertake an A$250 million equity capital issue via a renounceable entitlement offer to all shareholders. The issue has been fully underwritten by Swiss bank UBS AG, it said.

Nufarm's chairman Kerry Hoggard said: "Sumitomo's proposal places an appropriate value on the company and provides all Nufarm shareholders with the opportunity to realise a fair price for some of their shares. It also establishes a strategic relationship between Nufarm and Sumitomo that is expected to deliver meaningful benefits to Nufarm and its shareholders."