Olam Agri Extends Takeover Offer for Namoi Cotton Amid ACCC Review
NAMOI COTTON LIMITED (NAM) Share Update July 2024 Wednesday 31st
Olam Agri Extends Takeover Offer for Namoi Cotton Amid ACCC Review
Olam Agri Australia Pty Ltd has announced an extension of its off-market takeover offer for Namoi Cotton Limited, as it continues to engage with the Australian Competition and Consumer Commission (ACCC) regarding the acquisition.
Instant Summary:
- Olam Agri extends offer closing date to 13 August 2024.
- ACCC decision on the acquisition expected by 22 August 2024.
- Namoi Independent Directors recommend accepting Olam Agri's offer.
- Olam Agri's offer price is $0.70 per Namoi share, higher than Louis Dreyfus Company's offer.
- Samuel Terry Asset Management intends to accept Olam Agri's offer.
Offer Extension and ACCC Review
Olam Agri Australia Pty Ltd has extended the closing date of its off-market takeover offer for Namoi Cotton Limited to 7:00pm (Sydney time) on 13 August 2024. This extension comes as Olam Agri continues to engage with the Australian Competition and Consumer Commission (ACCC) to address any potential concerns regarding the acquisition.
The ACCC's decision on whether the acquisition will substantially lessen competition is expected by 22 August 2024. Olam Agri remains confident that the acquisition will not negatively impact competition and has proposed potential divestments to alleviate any concerns.
Shareholder Recommendations and Offer Details
Namoi Cotton's Independent Directors have unanimously recommended that shareholders accept Olam Agri's offer, provided there is no superior proposal and the Independent Expert continues to deem the offer fair and reasonable. Olam Agri's offer price of $0.70 per Namoi share is $0.03 higher than the competing offer from Louis Dreyfus Company Melbourne Holdings Pty Ltd.
Samuel Terry Asset Management, Namoi's largest shareholder with 25% of the shares, has indicated its intention to accept Olam Agri's offer once it becomes unconditional, barring a superior proposal and subject to the Independent Expert's ongoing favorable assessment.
Substantial Shareholding and Regulatory Filings
As of the latest update, Olam Agri has obtained voting power of 6.55% of Namoi shares. The company has also lodged the Third Supplementary Bidder's Statement with the Australian Securities and Investments Commission (ASIC) and provided copies to the ASX and Namoi Cotton.
The Third Supplementary Bidder's Statement, dated 1 August 2024, supplements previous statements and should be read in conjunction with them. Olam Agri advises shareholders to seek independent financial and taxation advice before deciding whether to accept the offer.
The extension of the offer and ongoing ACCC review introduce a degree of uncertainty that may affect Namoi Cotton's stock price. However, the higher offer price from Olam Agri and the recommendation from Namoi's Independent Directors could positively influence shareholder sentiment. The potential divestments proposed by Olam Agri to address ACCC concerns may also mitigate any negative impact on competition.
Investor Reaction:
Analysts are likely to view the extension and ACCC review as a mixed development. While the higher offer price and shareholder recommendations are positive, the uncertainty surrounding the ACCC's decision may cause some investors to adopt a wait-and-see approach. The support from Samuel Terry Asset Management, Namoi's largest shareholder, could provide additional confidence to other investors.
Conclusion:
Investors should closely monitor the ACCC's decision on 22 August 2024 and consider the implications of the extended offer period. The recommendation from Namoi's Independent Directors and the higher offer price from Olam Agri are key factors to consider. Staying informed on further developments will be crucial for making well-informed investment decisions.