The Takeovers Panel under the Australian Government is currently considering an application tabled by Louis Dreyfus Company regarding its tug-of-war takeover of Australian ginning business Namoi Cotton Limited.
Namoi is currently the subject of two competing off-market takeover offers from LDC and Olam Agri Australia Pty Ltd (Olam).
The Takeovers Panel has not appointed a sitting panel at this stage and no decision has been made whether to conduct proceedings.
According to a release from the federal body, LDC is seeking interim orders to prevent Olam from acquiring any shares or increasing its voting power in Namoi until the application is determined, among other orders.
Both LDC and Olam have launched respective off-market takeover offers of Namoi, with LDC offering $0.67 per share and Olam now offering $0.75 per share.
Olam upped its offer on September 13 from $0.70 per share after LDC scored approvals from the ACCC and FIRB regarding its acquisition of Namoi, allowing LDC’s offer to become unconditional. As of writing, Olam is still awaiting approval from both regulatory bodies.
LDC holds 21.3 per cent of Namoi shares as of September 13, while Olam bumped up its stake in the Australian ginning business to 16.34 per cent thanks to two significant Namoi shareholders who entered binding deeds with Olam hours after its offer lifted to $0.75.
The two significant shareholders are Samuel Terry Asset Management Pty Ltd as trustee for Samuel Terry Absolute Return Fund (STAM) and Harvest Lane Asset Management Pty Ltd (HL) - both owning 7.92 per cent and 2.07 per cent of Namoi shares respectively.
Following entry into the binding deeds with STAM and HL to acquire the blocking stake, Olam’s relevant interest in Namoi increased, which also includes conditional acceptances of 6.35 per cent under the Olam offer.
“LDC submits that the circumstances are unacceptable having regard to the effect that such circumstances are having on the acquisition of a substantial interest in Namoi, the effect the circumstances are having and will have on the control of Namoi and because the circumstances are preventing there being an efficient, competitive and informed market in Namoi shares,” a media release shared by the Takeovers Panel read.
“LDC submits that Namoi shareholders (including those who have already accepted into the Olam Offer) have not had a reasonable and equal opportunity to sell their Namoi shares unconditionally to Olam as opposed to through the Olam Offer which is highly conditional and uncertain.
“LDC submits that there has been a breach of section 623 of the Corporations Act 2001 (Cth) given STAM and HL have received a collateral benefit (being the unconditional and immediate sale of the blocking stake to Olam) which is a material net benefit and has induced STAM and HL to sell the blocking stake and which has not been made available to any other Namoi shareholders.”
Alongside the interim order of preventing Olam acquiring any more shares, LDC is also calling for the prevention of the blocking stake sale.
LDC also seeks final orders, including either preventing the blocking stake sale if completion has not occurred or unwinding the sale if it has occurred and requiring that before Olam proceeds with an on-market acquisition of Namoi shares while the Olam Offer is still conditional.
Moreover, LDC is also calling for Olam to give five business days’ notice if it will pursue an on-market acquisition and give Namoi shareholders who have accepted the Olam Offer "the right to withdraw their acceptance so that they can sell their Namoi shares into any order placed on market.”