Australia's largest cotton ginning business Namoi Cotton Limited is now fielding a new off-market takeover bid from global agribusiness Olam Agri Holdings Limited, intending to acquire all of its fully paid ordinary shares.
Olam is offering a $0.66 cash per share offer, subject to obtaining relevant interest in at least 50.1 per cent of Namoi shares.
It follows a recent takeover bid from global agriculture business Louis Dreyfus Company (LDC) for $0.60 per share.
Olam also proposes to increase the value of its Offer to $0.70 cash per Namoi Share if it obtains a relevant interest in at least 90 per cent of the Namoi Shares before the end of the offer period. Namoi shareholders will obtain the benefit of the increased offer price if the 90 per cent threshold is met, even if they have already accepted into the offer and have received payment of the offer price of $0.66.
Namoi's largest shareholder Samuel Terry Asset Management (STAM), which currently owns a 24.2 per cent stake in the company, has since come out in support of Olam's offer. The investment firm intends to accept Olam's offer.
Olam co-founder and group CEO Sunny Verghese said the company had completed its due diligence for the process.
“We have operated as a cotton grower, ginner and as merchant in Australia since 2007 through our wholly owned subsidiary Queensland Cotton,” Verghese said.
“This long experience has allowed us unique insights into the Australian cotton industry, where we have built strong relationships across the supply chain.
“This has provided us with a deep understanding of the needs and challenges associated with producing and merchandising high-quality cotton.
“Olam has significant global cotton industry expertise, including our operations in Brazil where we are also a grower, and Africa where we support our network of 340,000 farmers to improve practices and maximize incomes.
“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.”
According to Olan, the offer is being made as an off-market takeover offer rather than by way of a concurrent scheme of arrangement and takeover offer structure as originally proposed under Olam’s NBIO “to provide simplicity and certainty for Namoi shareholders.”
Olam will lodge a copy of its Bidder’s Statement with ASIC, and will send a copy to Namoi and ASX in due course.
Rothschild & Co is acting as financial adviser and Baker McKenzie is acting as legal adviser to Olam in relation to the offer.