Nov. 19 (Bloomberg) -- Nufarm Ltd., target of a A$2.8 billion ($2.6 billion) takeover bid by Sinochem Corp., said the Chinese group has completed a study of the company’s finances and the two parties are working on a final agreement.
“The due diligence period has officially ended,” Nufarm spokesman Robert Reis said today in a phone interview. “Both parties are now working on the transaction implementation agreement.”
State-run Sinochem, China’s largest chemicals trader, signed an initial accord in September to buy Melbourne-based Nufarm for A$13 a share to gain a global distribution network for pesticides and herbicides. It’s the second attempt in as many years by China to buy Australia’s largest farm chemicals supplier.
“Whilst there is still no guarantee a final agreement can be reached between the parties, the clearance of the due diligence hurdle has increased the probability of an agreed outcome being reached,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne.
Nufarm rose 1.3 percent to A$11.99 on the Australian stock exchange at 12:53 p.m. in Sydney. The stock has gained 14 percent this year, lagging the 27 percent rise in the benchmark S&P/ASX 200 Index.
An exclusivity period announced as part of the September agreement lapses on Dec. 3, Reis said. “The objective would be to, if possible, conclude the transaction implementation agreement by that date,” he said.
Any deal is subject to regulatory approvals in Australia and China. Reis couldn’t say whether Sinochem has lodged an application with Australia’s Foreign Investment Review Board.
Sinochem’s press officer Guo Fenglin couldn’t be reach for comment by phone at her office in Beijing.
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