Nufarm shares climb on talk of Sinochem approach

MELBOURNE, July 23 - Shares in Nufarm Ltd rose as much as 9 percent on Thursday on speculation Chinese firm Sinochem had made an approach to the A$2 billion- ($1.6 billion) valued Australian farm chemicals group.

The Australian Financial Review said in an unsourced story in its Street Talk section that Sinochem was rumoured to have hired RBS to help advise on its approach to Nufarm, while Nufarm was thought to be advised by JP Morgan.

"The shares are definitely up on that today," said Macquarie analyst John Purtell.

Nufarm shares last traded up 8.1 percent at A$9.64, valuing the group at A$2.1 billion, after touching a high of A$9.73.

An approach from Sinochem would mark the second attempt by a Chinese group to take over the company within the past two years.

Nufarm Managing Director and 11 percent owner Doug Rathbone and the group's spokesman were not available for comment, but an assistant said the company does not comment on speculation.

JP Morgan and RBS Australia both declined to comment.

In 2007, China National Chemical Corp (ChemChina), China's leading chemical producer, led a A$3 billion approach with U.S. private equity firms Blackstone Group and Fox Paine Management, looking to create the world's largest generic farm chemicals firm, but they failed to come up with a formal offer.

Nufarm cut its full-year profit forecast by 15 percent in June to around A$187 million due to weak sales of the weed killer glyphosate, but analysts expect an even weaker profit of around A$166 million, according to estimates tracker IBES.

"There's some ongoing risk around their North American business and the impact of reduced glyphosate prices," Purtell said.

The group raised A$300 million in May with a share sale priced at A$11.25 a share to cut debt. ($1=1.222 Australian Dollar)