re: Ann: Strategic investment from Sumitomo a... may have to do...

  1. 75 Posts.
    re: Ann: Strategic investment from Sumitomo a... may have to do with the equity raising and overall dilution of eps that will result. it's an odd one though, would have thought that the $14 would give a bump up by signalling a long term floor.

    Aspect Huntley's take is

    - NUF will undertake a $250 million equity raising via a renounceable entitlement offer to all shareholders, including Sumitomo.
    - NUF and Sumitomo will enter into an agreement to co-operate across a number of business areas. Sumitomos crop protection business generates annual sales of approximately US$1.3 billion and its product portfolio is complementary to that of Nufarm, with more than 40% of revenues relating to sales of insecticides. Sumitomo also has excellent research capabilities and is represented in markets around the world.
    - investment and the resulting benefits to the business are expected to provide Nufarm with access to additional new products and increased opportunities to expand and strengthen Nufarms position in various crop segments and geographic markets,
    Sumitomos proposal underscores the quality of NUFs franchise and its strategic value to other crop protection players. AHs trigger price is likely to rise to above $12.50 and Accumulate to around $11.50.
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