Namoi Cotton's board urges investors to reject LDC takeover bid
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The news: Namoi Cotton's board has recommended that its shareholders reject the latest takeover offer from Louis Dreyfus Company (LDC), as it believes a rival bid from Olam Agri Holdings offers more value.
The numbers: French agri commodities group LDC is the Queensland cotton operator's second-biggest shareholder with a 16.99% stake in the company.
Last week, LDC tabled an improved takeover offer of 67 cents a share for Namoi, which was topped a day later by Singapore-based Olam, with an offer of 70 cents a share.
The context: Namoi's board said that LDC's offer undervalues the company's shares in comparison to Olam's proposed bid, and that Namoi shares have consistently traded on the ASX above the offer price of $0.67 per share since the offer was announced.
Namoi shares last closed at $0.71, as the ongoing bidding war saw the stock gain more than 17% over the last month.
The board said that an independent expert determined LDC's offer was "neither fair nor reasonable" and noted the offer did not have support from Namoi's largest shareholder Samuel Terry Asset Management.
Last week, the Australian Competition and Consumer Commission (ACCC) outlined competition concerns with LDC's proposed acquisition of Namoi, noting that the deal would likely substantially lessen competition in the supply of cotton ginning services in the north of Western Australia and Northern Territory.
The source: ASX announcement
