United Phosphorus is set to bid for Nufarm, Australia's largest agriculture chemical company.
Sources close to the development said the Mumbai-based Shroff-family, promoters of UPL, has started discussions with the Australian firm's management.
The development follows Nufarm ending talks for a $3 billion bid with a consortium led by China National Chemical Corp (ChemChina), which includes private equity firm Blackstone.
UPL, which ranks among the top five crop protection companies in the world, has been keen on taking over a foreign giant after its abortive attempt to acquire Japan's Arysta LifeScience Corporation.
A banker in the know of the development said the discussions are at the initial stages.
Global crop protection giants like Syngenta, Makhteshim Agan, and Monsanto might also spring surprise bids for Nufarm, the banker said. He also did not rule out the possibility of a revival of talks between Chemchina and Nufarm.
The Nufarm stock today rose by more than two percent after ChemChina said it "was still considering possible acquisition of Nufarm."
This announcement is contrary to Nufarm's statement on Monday, according to which the ChemChina consortium had said it was unable to formalise its proposal by a deadline, which ended on Sunday.
Sources are of the opinion that UPL will rope in a private equity fund if it puts in a financial bid for Nufarm.
Apart from Blackstone, the ChemChina consortium includes private equity firm Fox Paine Management.
The consortium proposed to offer $17.25 cash per share and a pre-acquisition dividend of 30 cents per share.
Nufarm had said last week it had received approaches from parties interested in the company since the Chinese-led consortium proposed a takeover.