Olam Group’s 64.57%-owned subsidiary, Olam Agri, has announced its intention to make an off-market takeover of all the shares in Namoi Cotton.
Namoi Cotton is an Australian-owned and operated cotton ginning company.
In its May 2 release on the Australia Stock Exchange (ASX), Olam Agri said it intends to pay 66 Australian cents (59 cents) per share in cash. The offer will be increased to 70 Australian cents per share if Olam Agri obtains a relevant interest in at least 90% of shares in Namoi before the end of the offer period.
Shareholders of Namoi will also receive the increased offer price even if they have already accepted the offer of 66 Australian cents per share.
Olam’s offer is conditional upon the group obtaining a relevant interest in at least 50.1% of Namoi’s shares, as well as receipt of regulatory approvals and no “prescribed occurrences occurring in relation to Namoi”.
According to Olam, the takeover offer of 66 Australian cents represents a 10% premium to the Louis Dreyfus Company Melbourne Holdings’ (LDC) takeover offer of 60 Australian cents announced on April 29.
“Olam has successfully completed its confirmatory due diligence and is pleased to formalize its intention to acquire Namoi’s shares,” says Sunny Verghese, co-founder and group CEO of Olam.
“We have operated as a cotton grower, ginner and as merchant in Australia since 2007 through our wholly owned subsidiary Queensland Cotton. This long experience has allowed us unique insights into the Australian cotton industry, where we have built strong relationships across the supply chain. This has provided us with a deep understanding of the needs and challenges associated with producing and merchandising high-quality cotton,” he adds.
Shares in Olam closed 3 cents lower or 2.48% down at $1.18 on April 30.
