The independent directors of Namoi unanimously recommend that shareholders accept Louis Dreyfus Company Melbourne’s takeover offer
THE tussle for Australia’s largest cotton ginner is heating up. Olam Agri has raised its takeover offer to A$0.75 a share for Namoi Cotton, from A$0.70 a share.
The new offer by Olam Group’s indirect 64.57 per cent-owned subsidiary would value Namoi at A$154 million (S$134.7 million), up from rival bidder Louis Dreyfus Company Melbourne’s A$137.5 million.
This comes days after independent directors of Namoi unanimously recommended that shareholders accept Louis Dreyfus Company Melbourne’s takeover offer.
On Tuesday (Sep 10), Bloomberg reported that while Olam’s offer price of A$0.70 is marginally higher than its rival’s bid of A$0.67, Namoi Cotton believes that Olam’s bid is insufficient, given the greater uncertainty associated with it.
On Friday, Olam Agri said its offer price is almost 12 per cent more than, and superior to, its rival’s. It also urged all Namoi shareholders to reject Louis Dreyfus’ offer.
Ashish Govil, managing director of Queensland Cotton and country head for Olam Agri Australia, said its proposed acquisition will not substantially lessen competition in the Australia cotton industry.
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“Those familiar with the ginning services market understand the competitive nature of acquiring cotton to gin, practically making concentration of gin ownership less of an issue in today’s market,” he added.
Louis Dreyfus launched its takeover bid for Namoi last November, with a non-binding offer to purchase the balance shares at A$0.51 each.
The jostle started when Olam Agri put forward a competing takeover bid in March. Namoi said then that it was considering the bid by Olam in the context of its exclusivity obligations under the agreement with Louis Dreyfus.
Shares of Olam closed 1.8 per cent or S$0.02 higher at S$1.14 on Thursday.
