Louis Dreyfus trumps Olam in latest bid for Namoi Cotton

The international bidding war for ASX-listed Namoi Cotton has taken another turn, as a French crop trader closes in on a takeover.

French agricultural giant LDC raised its offer price to $0.77 cents per share, up from the $0.68 cents per share it had offered since last month.

Louis Dreyfus Company has trumped Olam Agri’s best offer for Australia’s largest cotton producing company, increasing their offer by almost 12 per cent.

On Tuesday, French agricultural giant LDC raised its offer price to $0.77 cents per share, up from the $0.68 cents per share it had offered since last month.

LDC has also raised its stake in Namoi Cotton to 47.66 per cent after Namoi’s largest shareholder Samuel Terry Asset Management accepted its offer, as trading for Namoi Cotton was paused twice.

The new offer by LDC is 28 per cent greater than their original offer price of $0.60 and 117 per cent higher than Namoi’s November 27 closing price of $0.355.

The latest LDC offer exceeds Olam Agri’s takeover offer of Namoi, which sits at $0.75 cents per share, after they raised their own bid last month.

The LDC offer, which is scheduled to close at 7pm on October 9, is unconditional after receiving ACCC and FIRB approval.

However, the Olam Agri offer is still currently under investigation by the ACCC, with the watchdog concerned Olam would operate four of the five cotton gins in the Lower Namoi Valley and have interests in both ProClass Pty Ltd and Australian Classing Services Pty Ltd, which together class more than 80 per cent of all cotton lint in Australia.

In response to these preliminary competition concerns, Olam has offered a court-enforceable undertaking that would require Olam to divest its Queensland Cotton gin at Wee Waa in NSW and its 20 per cent share of ProClass Pty Ltd.

“In assessing Olam’s proposed undertaking, we will need to be satisfied that it will effectively address our competition concerns in the supply of cotton ginning services in the Lower Namoi Valley in New South Wales and the supply of cotton lint classing services Australia-wide, as well as being structured in a way that is practical and effective,” ACCC Chair Gina Cass-Gottlieb said.

The ACCC invited submissions on the proposed Olam Agri undertaking by October 11.

“While we have decided to publicly consult on the proposed divestiture, this should not be interpreted to mean that this or any other form of remedy will ultimately be accepted,” Ms Cass-Gottlieb said.

Founded by Léopold Louis-Dreyfus in 1851, LDC notably sold a 45 per cent equity stake in the company to Abu Dhabi sovereign wealth fund Abu Dhabi Developmental Holding Company in 2021.

Saudi Arabia’s Public Investment Fund owns 35 per cent of Olam Agri.