25 June 1997 16:04 [Source: ICIS news]
LONDON (CNI)--France's Rhone-Poulenc is negotiating with the New Zealand group Fernz over control of the French chemical company Compagnie Francaise de Produits Industriels (CFPI), in which both groups have significant stakes, according to sources at the companies.
As Fernz's stake in CFPI has now increased beyond 33%, it was obliged last Wednesday (18 June) to launch a full takeover bid for the company. The public offer, at FF380 ($64.85) per share, runs until 23 July and values the whole company at FF538m.
But R-P, which sources several active ingredients from CFPI for its herbicide products, as well as a plant growth regulator, wants to retain control of these supplies. When its commercial agreements with CFPI expired at the end of last year, it tried to renew them or create a joint venture with CFPI to produce the molecules but was unsuccessful, according to a CFPI source.
Fernz's Australian subsidiary Nufarm, which has distributed CFPI products in Australia for several years, first took a stake in the French company last year and has been gradually taking over shares held by minority shareholders. It now owns 45.13% of CFPI's capital and 52.64% of the voting rights. R-P, which took a 16.2% stake in CFPI last November, now holds 32.09% and 27.46% of the voting rights. The rest of the shares are held by the financial investment group Orfimar (12%) and by public investors.
Nufarm has been dramatically increasing its presence in the European herbicides market in recent years. It has acquired herbicide facilities in the UK from R-P, in the Netherlands from Akzo Nobel and in Austria from AgroLinz.
According to Nick Lodge, commercial manager of the chemicals group at Fernz, the NZ group ultimately wants 100% of CFPI but it recognises R-P has ambitions in this direction as well. "The dialogue is continuing. We are negotiating with Rhone-Poulenc to find an outcome which will be acceptable to both," he said.
A spokeswoman for R-P in Paris told CNI that R-P legally has 30 calendar days from the launch of the Fernz bid to declare its own intentions. She said that negotiations between R-P and Fernz were focusing on either forming a joint venture for the oxynil active ingredients and the ethephon growth regulator, or reaching appropriate commercial agreements on these products.
CFPI had sales of around FF1.4bn and net profits of FF23.1m in the 1995/96 financial year. Both turnover and profits are expected to increase for the year ending 30 June 1997. Agrochemicals account for around 46% of group turnover, industrial speciality chemicals - including surface treatment chemicals, industrial surfactants and water treatment chemicals - account for 43% and fine chemicals for the pharmaceutical industry account for the remaining 11%.
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