Price cut puts Sinochem's Nufarm bid on shaky ground

Sinochem cut its takeover price for Australian agricultural chemical group Nufarm by 8% to US$2.3 billion after carrying out lengthy due diligence, the Financial Times reported. Nufarm’s board issued a statement Tuesday saying it hadn’t been able to clarify the terms and conditions of the new offer, under which Sinochem would pay A$12 (US$10.54) a share, down from A$13. Kerry Hoggard, the company’s chairman, stressed that the board would not support a proposal that undervalued Nufarm. It is thought that large institutional investors may also withdraw their support for the deal. Nufarm shares were trading at A$10.56 when suspended on Tuesday, the large discount to the offer price indicating market skepticism that the takeover will go through. In 2007, a joint bid for Nurfarm by China National Chemical Corp and US private equity group Blackstone fell through after no agreement could be reached within the allotted timeframe.