Louis Dreyfus trumps Singapore’s Olam in latest bid for Namoi Cotton, closing in on takeover

Sydney – Louis Dreyfus Company raised its bid for Namoi Cotton after acquiring nearly half of the Australian company’s shares, trumping Singapore’s Olam Agri, which said it will not to extend its buyout offer.

Dreyfus increased its bid to 77 Australian cents per cash share and said it now owned 47.66 per cent of Namoi’s shares, according to an exchange filing on Oct 1.

The offer, which values the cotton processor at A$158 million (S$140.6 million), is scheduled to close on Oct 9. Samuel Terry Asset Management, Namoi’s biggest shareholder, had accepted its offer, Dreyfus said.

In response, Olam Agri said on Oct 1 that it will not to extend its 75 Australian cents offer for Namoi Cotton, which values the Australian company at A$144 million, beyond its current closure date of Oct 8.

Mr Ashish Govil, managing director of Queensland Cotton and country head for Olam Agri Australia, said: “Olam Agri, together with its subsidiary Queensland Cotton, is an integral participant in the Australian cotton industry. We hope that our interest in acquiring Namoi Cotton is seen as a testament to Olam Agri’s willingness to invest in the Australian agriculture industry.”

Namoi shares rose as much as 8.8 per cent to 77.25 Australian cents at 12.53pm in Sydney. The stock has rallied 61 per cent in 2024.

Olam Agri is the indirectly owned subsidiary of Singapore-listed Olam Group, one of the world’s biggest agricultural commodity traders.

Olam and Dreyfus have been locked in a bidding war for Namoi since January, aiming to gain a bigger foothold in Australia’s cotton industry, the world’s sixth-biggest. 

Dreyfus’ most recent offer has set it up to close the deal and made an Olam takeover substantially less likely. 

Olam’s most recent bid was recommended by Namoi’s independent directors and major shareholders in September, but is still conditional on pending approval from Australia’s regulatory watchdog, which has raised competition concerns. It also requires support from more than half the company’s shareholders, which is likely to pose a challenge given Dreyfus now controls almost half of Namoi. BLOOMBERG