Olam Proposes AU$122 Million Takeover of Namoi Cotton

Olam Agri, a subsidiary of Olam Group Ltd., has made a non-binding indicative offer (NBIO) to acquire Namoi Cotton, Australia's largest cotton ginner. The proposal includes a bid of 59 Australian cents per share, which factors in a 1 cent special dividend, valuing Namoi at approximately A$122 million ($81 million). This offer is 16% higher than the previous bid from Louis Dreyfus Company (LDC), which was at 51 cents per share.

In an alternative approach, Olam Agri Holdings Ltd. has also proposed an off-market takeover bid of 57 Australian cents per share. This bid is conditioned on acquiring at least a 50.1% stake in Namoi. The move by Olam aims to consolidate its position in the Australian cotton sector by merging Namoi with its existing Queensland Cotton unit, which it has operated since 2007.

The offer has received backing from Namoi's largest shareholder, Samuel Terry Asset Management, despite LDC's competing offer. The acquisition would enhance Olam's capabilities in cotton merchandising and ginning, providing new opportunities for both the company and Australian cotton growers. The Namoi board is currently reviewing Olam's proposal in light of its existing exclusivity obligations with LDC, who has until the following week to respond to Olam's bid.