Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

The Namoi Cotton Ltd (ASX:NAM) takeover story has reached another interesting stage today, with one of the two competing bidders – Olam Agri Australia Pty Ltd – boosting its offer price to $0.75 per Namoi share.

The Singapore-listed Olam Agri has been in a bidding war with Louis Dreyfus Company (LDC) since May for the proposed acquisition of Namoi. It had initially offered $0.66 cents per share, but has upped the offer several times, and extended the offer for a third time – to October 8 – earlier this month.

LDC’s current offer price is $0.67 cents per share, as confirmed in May this year.

On September 11, Namoi provided the market with a First Supplementary Target’s Statement in response to LDC’s offer, confirming that its Independent Directors had unanimously recommended shareholders to accept the offer ‘in the absence of a superior proposal and subject to the Independent Expert continuing to conclude that the Offer is fair and reasonable’.

Following Olam’s renewed offer today, Namoi told shareholders it was considering both proposals, and would update the market in due course.

At the same time, Namoi shareholder Harvest Lane Asset Management Pty Ltd – which holds a 6% stake in the company – has recommended the company to accept Olam’s off-market takeover offer.

In June, financial regulator the ACCC raised concerns about the Olam Agri offer, given the latter company’s prior acquisition of Queensland Cotton – meaning its acquisition of Namoi would deliver it interests in two cotton grading companies which handle 80% of all cooton in Australia.

The regulator had raised similar concerns about LDC’s offer in May, but retracted them last month, based on court-enforceable steps taken by the company to lessen its asset holdings within the cotton ginning and cotton lint classing service sectors.

Namoi shares have risen on these developments. At 14:28 AEST, they were trading at 70 cents – an increase of 3.7% since the market opened.