Dutch global commodity merchant Louis Dreyfus Company (LDC) has raised its offer to acquire the remaining stake in Australia’s Namoi Cotton NAM.AX, topping a rival bid from Singapore-based Olam Agri.
LDC, which already owns around 17% of Namoi, has proposed to buy the rest of the Australian cotton producer for A$0.67 per share, valuing the company at A$138.6 million ($91.78 million). This is just above Olam Agri’s latest offer of A$0.66 per share, which valued Namoi at A$136.6 million.
Gaining full control of Namoi, Australia’s largest cotton producer, would help the successful bidder expand its presence in the country, giving it access to Namoi’s ginning network and warehouses in New South Wales and Queensland.
Both the offers from LDC and Olam Agri are subject to the bidders acquiring a 50.1% stake in Namoi. LDC has already rejected Olam Agri’s latest offer, while Namoi’s top shareholder, Samuel Terry Asset Management (STAM), has so far backed both the offers.
Just minutes after the new takeover offer was announced, an exchange filing showed that LDC had raised its stake in Namoi to 16.99% from 16.40%.
The bidding war between LDC and Olam Agri, which already owns rival Queensland Cotton, began in January this year. LDC had initially offered A$0.60 per share, which was outbid by Olam Agri. The Singapore-based firm had said last week its latest A$0.66 per-share offer would be hiked to A$0.70 if it obtained at least 90% stake in Namoi.
The increased offer from LDC suggests the company is determined to gain full control of Namoi, underscoring the strategic importance of the Australian cotton producer in the global supply chain.