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China National Chemical and Blackstone Group are teaming up to offer more than US$3 billion ($4 billion) for Australian farm chemicals group Nufarm, formerly New Zealand company Fernz.
Nufarm said on Thursday it had received a letter tied to earlier takeover talks but did not say who it was from, and said it would say more by Monday.
A source familiar with the deal said the consideration was likely to be more than A$3.4 billion.
At that level, the offer would represent more than a 25 per cent premium to Nufarm's market capitalisation of A$2.68 billion, based on its last trade at A$15.60.
Its shares jumped 13 per cent to A$15.60 on Wednesday after a Hong Kong newspaper reported a subsidiary of ChemChina was revising a US$2.7 billion, or A$17.10 a share, offer that Nufarm had rejected. The stock went on a trading halt on Thursday.
ChemChina's plan marks its latest push offshore, which began in 2005, when it bought a European silicone business from French firm Rhodia and acquired Australia's top polyethylene producer, Qenos, from Exxon Mobil and Orica.
Chief executive Aye Ren Jianxin, a former communist youth league leader, has turned ChemChina into a US$10 billion-a-year business with 120,000 employees, but it is still overshadowed by state-owned behemoths Sinopec and PetroChina.
Several other pesticide companies and private equity groups are seen as potential suitors for Nufarm, the world's No 2 generic farm chemicals company behind Israel's Makhteshim Agan Industries.
Any takeover would need the support of Nufarm's chief executive, Doug Rathbone, who owns 17 per cent of the company, and the Goodfellow family in New Zealand, whose affiliates together own about 10 per cent of the company.
Analysts have speculated that Makhteshim, also known as MA Industries, and US agrichemicals giant Monsanto would have the best fit with Nufarm.
Other potential bidders named include buyout funds Bain Capital and Advantage Partners.
- Reuters
