Manufacturing News

Battle for control of Namoi Cotton hots up

Manufacturing News

Just when it had looked as if control of Australia’s largest cotton processor, Namoi Cotton would fall to one Singapore predator, another Singapore company which had been the underbidder has stepped back into the ring.

Olam Agri Holdings announced today that it would increase its offer to buy the company to 66 cents cash, trumping Louis Dreyfus Company Asia Pte Ltd’s (LDC) recently increased offer of 60 cents.

Not only that but Olam has held out the carrot of 70 cents a share to be paid to all shareholders – irrespective of when they sold their shares – should Olam reach control of 90 percent of the shares in Namoi.

Namoi is one of the few elements of value adding left in the Australian cotton industry, operating 10 cotton gins on the east coast and in Northern Western Australia.

The company has previously recommended the LDC offer which appeared to be a clear winner, with Olam now upping the ante having completed its due diligence on the business.

Olam told investors: “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.”

Louis Dreyfus is closely involved with Namoi Cotton, has a 17 percent shareholding in the company, and is its joint venture partner in the Namoi Cotton Alliance and Namoi Cotton Marketing.

Further reading:
Now Namoi Cotton set to fall to a foreign buyer

Picture: Namoi Cotton

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