Toowoomba-based Australian cotton processor Namoi Cotton is now in the middle of a battle for control between two major Singaporean agribusiness companies.
2 Singaporean Companies Trying to Buy Toowoomba-based Namoi Cotton
Singaporean agribusiness Olam Agri Holdings has strategically positioned itself to acquire Namoi Cotton following the announcement of a $105 million takeover bid by fellow Singapore agricultural group Louis Dreyfus Company Asia (PDC) in November, which was formalised earlier this year.
Before declaring its intention to seize complete ownership of the Toowoomba-based company, PDC, holding a 17 per cent stake, is already a significant shareholder in Namoi, the largest Australian-owned and operated cotton processing group.
Another offer
Namoi Cotton disclosed days ago that Olam Agri Holdings has submitted its offer to the board following the closure of the market last March 20. They proposed a bid of 59 cents per share or $122m, surpassing the previous offer of 51 cents from PDC last year.
This offer includes a special dividend of 1 cent per share from Namoi as part of the total cash consideration. Major shareholder Samuel Terry Asset Management, holding a 22.37 per cent stake in Namoi Cotton, has already expressed its support for the Olam bid and is likely to accept a binding offer unless a superior offer emerges.
However, Olam’s bid may be subject to the exclusivity terms of the scheme implementation deed signed by Namoi with LDC in January, possibly involving a break fee payable to LDC.
Olam, which acquired Queensland Cotton in 2007, has significant cotton interests in Australia and investments in almond orchards, employing over 550 people in the country.
The Singaporean rival to LDC believes that combining Namoi Cotton and Queensland Cotton will create new opportunities for both businesses and Australian cotton growers.
The board of Namoi Cotton has informed shareholders that no action is necessary at this time.
News source: AFR and in part from Business News Australia
Featured image: Namoi Cotton Facebook page.
