India’s "Business Standard" reports that the country's largest pesticide maker, United Phosphorus Ltd. (BSE: 512070), is in talks with Makhteshim Agan Industries Ltd. (TASE: MAIN) to buy 39% of the company for around $1.1 billion. If a deal is closed, it will make United Phosphorus the world’s largest generics agrochemical company.
The sale price reflects a 62% premium on Makhteshim Agan's opening price of NIS 15, giving a market cap of NIS 6.5 billion. The share rose 6% on the TASE today.
However, a spokesman for Makhteshim's parent company IDB Holding Corporation denied that negotiations are taking place and told "Globes" "there is no such thing."
"Business Standard" reports that United Phosphorus executives met Nochi Dankner in July. Dankner controls Makhteshim Agan through IDB Holding Corp. Ltd. (TASE:IDBH) unit Koor Industries Ltd. (TASE:KOR).
"Business Standard" adds that United Phosphorus approached several banks three weeks ago to seek financing for the acquisition. The banks include UBS, Deutsche Bank, HSBC, SBI and ICICI. It adds that United Phosphorus and Koor executives are due to meet later this month. United Phosphorus declined to comment on the report.
"Business Standard" said that United Phosphorus has conducted due diligence on Makhteshim and that McKinsey & Co. evaluated the synergy potential of a deal. The paper quotes an investment banker as saying, It now depends on whether UPL is able to raise funds for the acquisition in this market, but it could be difficult."
In June, IDB cancelled negotiations with a foreign company for the sale of Makhteshim Agan.
Published by Globes [online], Israel business news - www.globes-online.com - on October 19, 2008
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