Namoi Cotton shares soar on takeover offer by Singapore's Olam
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The news: Shares in Queensland cotton operator Namoi Cotton soared beyond 20%, after the ASX minnow received a $122 million takeover bid by Singapore-based agribusiness Olam Agri Holdings.
The numbers: Olam's non-binding, indicative and conditional offer included a total cash consideration of 59 cents per share and a special dividend of 1 cent per share.
In January, Namoi received a separate bid from French merchant firm Louis Dreyfus to acquire the remaining 83% of issued shares in the company that it does not currently own. The latest bid, however, tops Louis Dreyfus' offer of 51 cents per share.
Namoi shares were up 20.2% to $0.6 by 2:10pm AEDT.
The context: Olam, majority owned by SGX-listed Olam Group, already has a presence in Australia through its wholly owned subsidiary Queensland Cotton, which it acquired in 2007. Its parent company Olam Group also employs over 550 people in Australia through its almond orchards and processing businesses.
In its takeover offer, Olam said that "combining Namoi and Queensland Cotton will unlock new opportunities for the two businesses and for Australian cotton growers." Olam noted that it intends to continue to operate Namoi's business under the Namoi Cotton brand, and invest to grow the Namoi franchise profitability.
The Namoi board said it is considering the Olam offer in the context of its exclusivity obligations under its scheme implementation agreement with Louis Dreyfus.
The source: ASX announcement
