Singapore’s Louis Dreyfus Company finally wins the battle for Namoi Cotton at a hefty $158m

LDC now has now moved to majority control of Namoi Cotton after the cotton ginner’s independent directors yesterday unanimously voted to accept the latest increased offer of 77c per share, valuing the group at $158 million.

The final price is up from $105 million, or 51c per share, offered by LDC when it first lobbed the bid in November last year.

The offer of 77c per share is up from a revised 68c per share issued by LDC just two days ago, coming a day after rival bidder Olam Agri Holdings, a fellow Singapore-based agribusiness, said it would not be lifting its conditional offer of 75c per share when it lapses on 8 October 2024.

Namoi Cotton’s largest shareholder, Samuel Terry Asset Management, has accepted the revised offer, giving LDC control over 25 per cent of Namoi’s shares in addition to the 22 per cent it already owned.

Namoi’s executive chairman Tim Watson has also sold all of his shares to LDC, along with all other independent directors who held shares in the company.

“We are delighted that the independent directors of Namoi have unanimously recommended our offer and subsequently accepted their shares into our offer,” says LDC’s Australian managing director Tony Geitz.

“Our offer is at a very significant premium, being 117 per cent higher than the undisturbed Namoi share price on November 27.

“It provides shareholders with outstanding returns and a unique opportunity to capitalise on significant value immediately.”

Olam and LDC have been in a bidding war for Namoi Cotton for the better part of a year, as indicated by the winning offer which was made in LDC’s fifth supplementary bidder’s statement this week.

In conceding defeat to LDC yesterday, Ashish Govil, the Queensland cotton and country head for Olam Agri Australia, said that together with its subsidiary Queensland Cotton, Olam 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,” he said.

“The proposed acquisition led to a robust and competitive process for Namoi Cotton, allowing the company to realise a full and fair valuation for the benefit of all shareholders.”

Olam’s bid for Namoi initially had raised a red flag for the Australian Competition and Consumer Commission, but that led Olam to offer a court-enforceable undertaking to divest its Queensland Cotton gin at Wee Waa in NSW and its 20 per cent share of its cotton lint classing service provider ProClass.

Olam has significant cotton interests in Australia after acquiring Queensland Cotton in 2007, while it also has investments in almond orchards and processing, including a second cotton lint classing business, Australian Classing Services, all of which employ more than 550 people combined in Australia.

LDC already held 17 per cent of Namoi shares prior to announcing its takeover bid for the Toowoomba-based Namoi Cotton in November last year.

A global agricultural merchant and processor with extensive interests in textiles, bioenergy, plant proteins and pet food, LDC is Namoi’s joint-venture partner in Namoi Cotton Alliance and Namoi Cotton Marketing Alliance.

Namoi Cotton is the country’s largest Australian-owned and operated cotton processing group. The company operates 10 cotton gins at nine sites across NSW and Queensland, and it also has a joint venture with the Wathagar Ginning Company, which has a cotton gin located in the Gwydir Valley of NSW.

LDC’s offer for Namoi Cotton is scheduled to close on 9 October 2024.