Nufarm talks about Sinochem’s takeover

Date:09-04-2009

Agriculture chemicals company Nufarm says talks about a potential takeover by Chinas largest chemicals trader, Sinochem Corp, are continuing but it cannot disclose details.

Nufarm revealed in July that it had been approached by Sinochem about a potential takeover on a confidential, preliminary and incomplete basis.

Nufarm managing director Doug Rathbone said yesterday he could not comment on the progress of the talks.

Asked if any offer had been made by Sinochem, Mr Rathbone said: Too sensitive. I cant talk about it.

Mr Rathbone said Nufarm was willing to work under the Chinese.

The position from them, as it is from other companies that talk to us, is that they want the company, they want the team, they want the strength of what were building, Mr Rathbone said. Nufarm has a really strong platform globally, and thats obviously attractive.

And we have growth ambitions, and those growth ambitions can certainly be met with more capital.

Mr Rathbone, who holds a stake of about 11.3 per cent in Nufarm, said he was ready to sell his holding if the price was right.

The last caveat is the important one, Mr Rathbone said.

Last week, Nufarm told the stock exchange that no agreement had been reached with Sinochem, and there could be no assurance that any agreement would be reached.

Nufarm has further downgraded its earnings guidance, saying it now expects to report a net operating result for the 2009 financial year of about $135 million to $145 million.

The company said the revision was mainly a result of a substantial fall in the selling price of the weed killer glyphosate in US markets in June and July, and lower than forecast volume sales of glyphosate.

In May, when Nufarm announced a $300 million capital raising to repay debt, it affirmed previous guidance for a full-year operating profit of about $220 million, but subsequently downgraded the guidance several times - in June, July and August.

Nufarm is scheduled to release it annual results on September 28.

Nufarm shares closed up 6¢ at $11.26.