Shares in crop protection group Nufarm (NUF) soared as much as 12.3% on Monday to hit a 52-week record of $17.52 after the company said it had agreed to a takeover proposal worth up to $3 billion from a consortium led by China National Chemical Corporation (ChemChina).
Nufarm has declared a pending $0.30 dividend per share prior to the acquisition and says the consortium has agreed to an offer of $17.25 per share and the $0.30 per share dividend (for total consideration of $17.55 per share.)
In an announcement to the stock exchange, Nufarm said the proposed offer values the company at around $3 billion.
"The board of Nufarm has thoroughly reviewed the proposal and on the basis that the consortium agrees to allow Nufarm to pay the maximum $0.30 dividend per share, has unanimously resolved it proposes to recommend shareholders vote in favour of the scheme should it proceed, subject to there being no superior proposal an subject to an independent expert report," the company said.
"We acknowledge the consortium's proposal which may lead to a transaction which realised fair value for Nufarm shareholders," chairman Kerry Hoggard said.
The offer proposes that Nufarm's management team continue to manage the company and that senior management be retained in order to preserve Nufarm's business culture.
Under the proposal, corporate headquarters in Melbourne would be maintained.
Nufarm is Australia's largest agriculture chemicals business with manufacturing and marketing operations based in Australia, New Zealand, Asia, Europe and the Americas. It employs 2,600 people.
Nufarm's recent results and short term profit growth outlook has been impacted by the drought in Australia.
With farmers cutting back planting, this consequently means lower demand for fertiliser and crop protection products.
Its net profit before one-off items for the year ended July 31 dipped 0.3% to $120.86 million.
The company forecast a 2008 operating profit of about $145 million, and while representing an increase of around 19%, was lower than initial market expectations.
Nufarm closed up 11.15% at $17.34.
