Olam Group’s indirect 64.57 per cent-owned subsidiary Olam Agri has on Thursday (May 2) increased its off-market takeover offer to acquire all shares in Namoi Cotton, topping its rival Louis Dreyfus Company Asia’s sweetened bid made a few days before.
Olam Agri raised its offer to A$0.66 cash per share, subject to obtaining an interest in at least 50.1 per cent of Namoi shares, up from its Mar 21 offer of A$0.59 per share, and higher than Louis Dreyfus’ offer of A$0.60 per share, which was made on Monday.
Olam Agri also proposed to increase its offer value to A$0.70 cash per share if it obtains at least 90 per cent of Namoi shares before the end of the offer period. Shareholders who have accepted and received the A$0.66 offer will obtain the benefit of the increased offer price if the 90-per-cent threshold is met, Olam Agri noted.
Louis Dreyfus initially launched its takeover bid for Namoi last November with a non-binding offer to acquire the balance shares for A$0.51 each. Following that, Louis Dreyfus, which owns a 17 per cent stake in Namoi, signed a binding agreement in January to acquire the remaining 83 per cent of shares via a scheme of arrangement.
The tussle for Australia’s largest cotton ginner started when Olam Agri put forward a takeover bid two months later.
In response to Olam Agri’s bid, Louis Dreyfus raised its offer for outstanding shares to A$0.60 each on Apr 29.
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Olam Agri noted on Thursday that its new takeover offer is “materially higher” than Louis Dreyfus. As compare to Louis Dreyfus’ most recent takeover offer, Olam Agri’s A$0.66 per share offer represents a 10 per cent premium and the increased offer price of A$0.70 represents a 17 per cent premium.
Olam co-founder and group chief executive offer Sunny Verghese noted that Olam has long operated as a cotton grower, ginner and merchant in Australia since 2007 through its subsidiary Queensland Cotton, giving the group a “deep understanding” of the needs and challenges associated with producing and merchandising high-quality cotton.
“This international experience and deep local knowledge, coupled with our credentials as one of the world’s largest private cotton ginners, positions us perfectly to support Namoi and foster its future growth,” said Verghese, adding that Olam’s operations in Brazil and Africa also provides it with global expertise.
Olam’s : VC2 0% shares closed Tuesday down 2.5 per cent or S$0.03 to S$1.18 on a cum dividend basis.
