The independent directors of Australian ginning business Namoi Cotton Limited are now telling all its shareholders to accept the takeover offer by Louis Dreyfus Company and to reject the opposing offer from Olam Agri.
Since May 31 this year, Namoi’s directors had been vying for shareholders to accept Olam’s takeover offer of $0.70 per share, which remains at the same level today. This is $0.03 above LDC’s current offer of $0.67 per share.
According to Namoi, one key reason for the preference flip is that the LDC offer has become unconditional, following clearance and approval from the ACCC and FIRB.
The Olam offer is still under scrutiny by the ACCC, subject to a number of material conditions.
Namoi adds that the LDC offer also provides an opportunity to realise certain value for Namoi shares, which may not be achieved if the LDC offer does not proceed.
“Namoi shareholders who accept the LDC Offer will be paid the offer price on the later of 10 Business Days after receipt of valid acceptances and 10 Business Days after the date the offer became unconditional,” Namoi shared in a statement.
Namoi added that if shareholders do not accept the LDC offer, their options to realise appropriate value for their shares in the future could be constrained, and that there is a risk they could become a minority shareholder in Namoi.
Namoi also reported that an independent expert has determined the offer is “fair and reasonable” to its shareholders.
LDC’s relevant interest in Namoi shares has increased to approximately 20.24 per cent, while Olam’s interest is 6.02 per cent.
The ACCC has reportedly requested further information from Olam and has delayed the proposed date for announcement of its findings in relation to the Olam Offer until at least October 31, 2024.