Nufarm shareholders approve Sumitomo Chemical’s 20% stake

02 March 2010 08:48  [Source: ICIS news]

SINGAPORE (ICIS news)--The shareholders of Australia-based crop-protection company Nufarm have agreed to sell up to one-fifth of its shares to Japan’s Sumitomo Chemical at Australian dollar (A$) 14 ($12.60) per share, the company said in a statement on Tuesday.

The company’s shareholders approved the acquisition in a meeting on Tuesday, following Sumitomo’s proposed offer in December, the statement said.

Nufarm had previously rejected an offer from China’s Sinochem Corp of A$12 cash per share, as the company’s management felt that it undervalued Nufarm.

Since December, Sumitomo and Nufarm have identified specific areas of cooperation, Nufarm managing director Doug Rathbone said.

“We have identified additional distribution opportunities involving Sumitomo chemistry across Nufarm’s platform in other parts of the world and have committed to execute agreements by the middle of this year covering Canada, Indonesia and a number of markets in Europe,” Rathbone said.

The company had also agreed to distribute five Sumitomo products, focused on a range of crops, in Brazil, he said.

“We estimate that these agreements will generate meaningful additional revenues for Nufarm and will be an important contribution to Nufarm’s product diversification strategy over the next few years,” added Rathbone.

Nufarm said following the completion of the tender offer with Sumitomo, the Melbourne-based firm would undertake an A$250m equity capital raising via a renounceable entitlement offer to all of its shareholders.

Sumitomo has agreed to fully take up entitlement under this offer to maintain its stake in Nufarm, which would “maintain its ownership interest in Nufarm acquired under the tender offer”, said Nufarm chairman Kerry Hoggard in a separate statement.

The company expected to announce the terms of the entitlement offer, including the price, in mid- to late April, with the offer expected to be completed by June, Hoggard said.

($1= A$1.11)

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By: Nurluqman Suratman

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