Olam Agri raise Namoi Cotton takeover bid to $154 million

The battle to own Australia’s largest cotton producing company has taken another twist with a Singaporean giant raising the stakes.

Namoi Cotton's Goondiwindi cotton gin. Picture: supplied.

The battle for Australia’s largest cotton producing company, Namoi Cotton, is nearing an inflection point after competing buyer Olam Agri upped its takeover bid to more than $150 million.

On Friday morning, the Singaporean-based giant announced to the ASX its offer to purchase Namoi Cotton was raised from $0.70 to $0.75 cash per share, valuing the company at about $154 million.

The increased offer represents an almost 12 per cent premium on the competing bid from French agricultural giant Louis Dreyfus Company, which sits at $0.67, valuing the company at about $138 million.

“We present a distinctly superior price for Namoi compared to LDC, demonstrating our steadfast belief in its value and potential,” Olam Agri chief executive fibre, agri-industrials and ag services Ashok Hegde said.

“We urge Namoi’s board and shareholders to recognise the superior value of our offer.”

Namoi Cotton has been subject to takeover offers since January 2024. Picture: supplied.

On Friday afternoon Namoi’s directors announced they were in support of the Olam Agri bid, two days after they first switched their position to accept the Louis Dreyfus Company’s bid after last week’s announcement it had become unconditional following both FIRB and ACCC approval.

The Namoi director’s revised decision came after Namoi Cotton’s largest shareholder, Samuel Terry Assest Management, which owns a 25 per cent interest in Namoi, told the ASX it supported Olam Agri’s revised bid and urged Namoi directors to engage with Olam regarding its revised offer.

On Friday, Harvest Lane Asset Management sold about 4.2 million Namoi shares at $0.75 to Olam Agri, with the deal ceasing Harvest Lane’s standing as a substantial holder.

The Louis Dreyfus offer closes at 7pm, on September 20, unless further extended by the French agricultural merchant.

The now $154 million offer from Olam Agri still remains subject to an ACCC investigation, where a decision has been proposed to be made on October 31.

On August 2 the ACCC requested further information from the parties and third parties, subsequently delaying the decision from the originally proposed August 22.

On September 3, Olam Agri extended its offer until 7pm on October 8.

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 (ADQ) in 2021.

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