Sinochem trims offer for Aussie firm
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Sinochem, China's largest chemicals trader, cut its proposed offer for Australia's farm chemicals maker Nufarm Ltd by 7.7 percent to A$2.6 billion (US$2.3 billion).
The state-owned Chinese company revised down the value of Nufarm at A$12 a share from an initial offer price A$13, Nufarm said yesterday in a statement on its Website. The company suspended trading of its shares in Sydney yesterday until Tuesday to review the revised price and seek clarification from Sinochem on the terms. Nufarm shares have never traded above A$13.
Sinochem made a A$2.8 billion non-binding bid for Nufarm on September 27. The two companies agreed to extend the talks to today after Sinochem said it needed longer time to conduct due diligence on Nufarm before making final decision on the offer price.
Up to yesterday, shares of Melbourne-based Nufarm have slid 12 percent to close at A$10.56 since the initial accord with Sinochem was announced on September 28.
The takeover fits Sinochem's strategy to be a leading global player as Australia's largest farm-chemicals supplier has a global distribution network covering New Zealand, Asia, the Americas and Europe.
Nufarm's Chairman, Kerry Hoggard, said the company is disappointed that Sinochem hasn't proceeded with an acquisition on the basis that was previously agreed.
"The Nufarm Board has strong confidence in the future growth and success of the company and isn't prepared to support a proposal that undervalues the business," Hoggard said in a statement.
Hoggard said the board will now carefully review all options for generating maximum value for Nufarm shareholders. Earlier this month, Nufarm said it would not accept anything less than A$13 a share.
The bid is the second time in as many years by a Chinese firm to buy the Australian company for its global distribution network for pesticides and herbicides after China National Chemical Corp failed to launch a A$3 billion bid in December 2007.
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