Australian cotton processor Namoi Cotton Ltd (ASX: NAM) has seen its shares jump more than 13 percent as two agribusiness giants – one French and the other Singaporean – duke it out with takeover offers for the company which first began in March.
According to the intention for takeover announced by Olam Agri today, shares would be priced at 70 cents, with this offer coming only three days after Louis Dreyfus Company Melbourne Holdings Pty Ltd made its own offer for shares priced at 60 cents, which went one cent per share over Olam’s first offer in March.
Olam Agri’s position has been boosted by a letter of support from Samuel Terry Asset Management Pty Ltd (STAM), a Namoi Cotton shareholder which holds a 24.2% interest in the company.
According to the letter, STAM considers the recent offer superior to that of Louis Dreyfus, encouraging the Namoi board to engage with Olam Agri to discuss it further, and adding that STAM itself has accepted the offer – although Namoi has told other shareholders that they need take no action for the moment.
Olam Agri has outlined the terms of its offer, under which Namoi shareholders would receive 66 cents per share, increasing to 70 cents if Olam gains a relevant interest in up to 90% of the Namoi shares before the offer period is over.
At least 50.1% acceptance would be another condition of the offer, in addition to receipt of regulatory approvals from the ACCC and FIRB, and no ‘prescribed occurrences’.
Namoi is the largest Australian-owned and operated cotton processing organisation, which started its life in 1962 as a grower cooperative. Its assets include 10 cotton gins, three warehouse facilities, 90,000 metric tonnes of shed storage and 275,000 metric tonnes of grain packing capacity.
Namoi Cotton shares are trading at 72.5 cents at 12:30 AEST.