Australia's agricultural chemical manufacturer Nufarm Ltd said yesterday that it had extended talks with China's state-owned Sinochem Corporation to 23 December 2009 and said that the Chinese conglomerate must complete the proposed takeover deal to the agreed price of $2.5 billion.

After Sinochem failed to meet a 3 December deadline to complete the transaction since it needed more details for its due diligence, Melbourne-based Nufarm has now extended the deadline for talks on a $2.5 billion takeover offer made in September by Sinochem for Nufarm. (See: Sinochem makes $2.5-billion takeover bid for Australia's Nufarm)

Nufarm chairman Kerry Hoggard today told shareholders at the company's annual general meeting that the company would continue to hold talks with Sinochem, as long as China's biggest chemical trader Sinochem was still offering $13 per Nufarm share.

Beijing-based Sinochem Corporation, part of the Fortune 500 Company, had entered into a heads of agreement with Nufarm on 29 September to acquire all of the issued ordinary shares in Nufarm for A$13.00 per share - a 17-per cent premium to Nufarm's last closing price.

Nufarm is one of the world's leading crop protection companies with manufacturing and marketing operations based in Australia, New Zealand, Asia, Europe and the Americas, and sells products in more than 100 countries around the world.

Nufarm had said that it would work with Sinochem until 3 December 2009 on an exclusive basis to negotiate a transaction implementation agreement, which would includes a five-week period in which Sinochem will undertake due diligence on Nufarm.

Yesterday Nufarm said that there was no certainty of a deal and talks would be non-exclusive from today.

Hoggard said "In the event that any alternative options may come forward - your board will consider if those options are in the interest of shareholders and the future growth and success of the company."

"Sinochem's inability to meet the previously agreed timetable is a disappointment to your board and - I am sure - to Nufarm shareholders.

"On balance, however, the board has determined that Sinochem should be given this limited additional time to complete its assessment, confirm its position and undertake the necessary steps to be able to execute the contract."

According to analysts, the fact that Sinochem has asked for more time to do due diligence indicates that the Chinese company is losing interest in the acquisition, which has led to Nufarm's stock price dropping to $10.51, much below the A$13.00 offer made in September.

Nufarm, also had made many earnings downgrades and has suffered a 42 per cent drop in profits and the transaction may run into trouble if Nufarm's shares fall down below the offer price.