This comes days after independent directors of Namoi unanimously recommended that shareholders accept Louis Dreyfus Company Melbourne’s takeover offer
THE tussle for Australia’s largest cotton ginner is heating up as Olam Agri raised its takeover offer to A$0.75 per share for Namoi Cotton, from A$0.70 per 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 the rival bidder’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 offer. It also urged all Namoi shareholders to not accept 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 initially launched its takeover bid for Namoi last November with a non-binding offer to purchase the balance shares for A$0.51 each. He currently owns more than 20 per cent of Namoi’s shares.
Following that, Louis Dreyfus, who owned 17 per cent stake in January, signed a binding agreement to acquire the remaining 83 per cent of the shares via a scheme of arrangement.
The jostle with Namoi started when Olam Agri put forward a competing takeover bid two months later. 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.
