The Nufarm Limited (ASX: NUF) share price closed 6.03% higher on the ASX yesterday as Macquarie Group Ltd (ASX: MQG) bought up big in the Aussie agribusiness group.
Why did the Nufarm share price surge higher?
The Nufarm share price closed higher at $4.92 per share yesterday as Macquarie increased its already substantial equity stake in the ASX chemicals group.
As per Nufarm's ASX release yesterday, Macquarie purchased nearly 9 million additional Nufarm shares to increase its voting power by 2%.
Previously, Macquarie owned 19,294,099 Nufarm shares but has since increased its voting stake to 7.38% following yesterday's purchase.
The largest holder of Nufarm shares within the Macquarie Group is Macquarie Bank Ltd with 23,451,739, with the rest largely within the group's investment management arms.
While it's hard to say why Macquarie has been buying up more Nufarm shares, I think it could be a case of opportunistic buying from the Aussie wealth management group.
How has the Nufarm share price performed in 2019?
I think Nufarm's recent share price devaluation is a key factor, with the current $4.92 per share a long way shy of Nufarm's 52-week high of $7.69, despite a record start to the year for the Aussie stock market.
One of the big reasons behind the company's share price falling 20.6% so far this year has been the ongoing Monsanto-Bayer Roundup lawsuits in the United States (US) and around the globe.
The company is subject to over 11,000 lawsuits over its weed killer product, with allegations that it is the cause of Non-Hodgkin lymphoma in many of the plaintiffs.
Monsanto has already lost several of its early cases in the US, however, these remain before the courts and subject to a lengthy appeals process.
The concern for Nufarm is whether or not its similar glyphosate-based products could come under the same scrutiny in Australia, the occurrence of which could have a material financial impact on the company's expenses.
However, with no allegations or lawsuits against the company as yet, Macquarie has clearly taken the chance to buy what they see as a bargain in the S&P/ASX 200 (INDEXASX: XJO) index.
