Japan's Sumitomo Boosts Nufarm Stake to 21.7%

Submitted by Sharemarket News on 10 May, 2011 - 16:43

After Nufarm Limited (ASX:NUF) chief Doug Rathbone sold 4.5 million shares to Japanese firm Sumitomo Chemicals, Sumitomo said that it plans to further increase the stake by adding 1.3 percent to the 21.7 percent already acquired. According to the Sumitomo statement, the purchase of additional shares is planned in the next six months.

"Sumitomo's strategic relationship with Nufarm is progressing smoothly in such fields as distribution, development, manufacturing (formulation) and procurement and logistics, and synergies from the collaboration have already started to materialise," said the statement.

The sale proceeds are going to meet a personal tax liability that is due this year, according to Rathbone. The 4.5 million shares deal was finalised on Monday at $5.28 per share. Sumitomo originally acquired 20 percent of Nufarm shares for $14 per share in April 2010, making it Nufarm's largest shareholder.

Sumitomo boosted its stake in Nufarm to "strengthen the relationship with Nufarm and to help expedite additional areas of collaboration." Sumitomo, however, cannot increase the stake beyond 23 percent without approval from Nufarm board under the agreement terms. Sumitomo has the option of making an offer to Nufarm shareholders to purchase the company.

Nufarm shares added 35 cents, up 7.34 percent to $5.12 at 1415 AEST Tuesday.