Olam bids $0.59 per share for Namoi Cotton acquisition

The offer may rise to $0.62 if Olam Agri secures 90% of Namoi’s shares by offer end.

Olam Agri Holdings Limited announced it is making an off-market takeover offer to acquire Namoi Cotton Limited for $0.59 (A$0.66) per share, subject to obtaining at least a 50.1% stake in the latter.

“The offer is being made as an off-market takeover offer rather than by way of a concurrent scheme of arrangement and takeover offer structure as originally proposed under Olam’s NBIO to provide simplicity and certainty for Namoi shareholders,” Olam Agri explained.

The agri-business unit of the Olam Group said the offer price may be increased to $0.62 (A$0.70) apiece if it obtains at least 90% of Namoi’s shares before the end of the offer period. 

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The company assured shareholders they would still benefit from the higher offer, even if they had accepted and received payment at the initial price.

Olam Co-Founder and Group CEO Sunny Verghese said the move formalises the company’s intention to acquire  Namoi after completing its confirmatory due diligence.

The company noted that the takeover will be 100% cash. Rothschild & Co. will serve as the financial adviser, whilst Baker McKenzie will act as the legal adviser in relation to the offer.

“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,” Verghese said. 

He also noted Olam Agri’s cotton operations in other areas, including Brazil and Africa. 

A$1=S$0.89