Blackstone, ChemChina eye A$3bn take-private(4)

The Blackstone Group and China National Chemical Corporation are part of a consortium offering A$3 billion to take private an Australia-listed agricultural chemicals maker.

Nufarm, an Australian agricultural chemical maker listed in Australia, has entered into exclusive negotiations with a consortium including The Blackstone Group and trade buyer China National Chemical Corporation (ChemChina).

Fox Paine, a US private equity firm, is also in the club proposing a A$3 billion ($2.77 billion; €1.9 billion) takeover.

The consortium has added significance since China invested $3 billion of foreign reserves in Blackstone’s IPO a few months ago.

Some government officials have been under ‘pressure’ because Blackstone’s post IPO performance has disappointed, but this deal shows the value of the investment in less tangible terms.

The consortium is offering to acquire all of Nufarm shares for A$17.25 a share via a scheme of arrangement, according to an exchange filing. Separately, Nufarm will pay a dividend of up to 30 cents a share based on the company’s earnings and cashflow prior to the acquisition. Together this values Nufarm’s market capitalisation at up to A$3 billion, according to the filing.

Nufarm’s board is backing the deal unanimously.
The transaction proposes to combine Nufarm with some businesses of ChemChina in an effort to create a global leader in off-patent crop protection. It has also been proposed that the existing management of Nufarm continue to manage the merged operations, and Nufarm maintains its corporate headquarters in Melbourne.

For Blackstone, Nufarm represents a second take-private attempt in Australia, after it withdrew from the high profile take-private contest for Australian second-largest retailer Coles. Nufarm is being advised by Goldman Sachs JBWere and Arnold Block Leibler.