By Aaditya GovindRao and Rajasik Mukherjee
(Reuters) -Singapore’s Olam Agri [IPO-OLAA.SI] raised its stake in Australia’s Namoi Cotton, it said on Friday, hours after increasing its buyout offer for the cotton ginning firm to top Dutch commodities trader Louis Dreyfus Co’s (LDC) bid.
However, LDC also raised its stake in Namoi, to above 21%, on Friday, toppling Samuel Terry Asset Management to become the firm’s top investor, amid its eight-month-long bidding war with Olam Agri for the world’s sixth-largest cotton producer.
Olam Agri now owns 16.34% of Namoi after buying shares from Samuel Terry Asset Management and another investor at A$0.75 each, the same as its offer for the other shares it doesn’t own.
That values Namoi at A$155.2 million ($104.3 million) and is higher than LDC’s offer of A$0.67 per share, which values Namoi at A$138 million.
Namoi shares jumped 4.4% to close at A$0.705, above LDC’s per-share offer but below Olam Agri’s, indicating shareholders are likely concerned about the Singaporean company’s bid going through.
Australia’s competition regulator (ACCC) is yet to clear Olam Agri’s offer even though it has agreed to divest certain local operations, while they cleared LDC’s bid last month after the trader agreed to certain divestitures.
“The bump (in Olam Agri’s offer) doesn’t change the ACCC application process,” said David Blennerhassett, content strategist at Ballingal Investment Advisors.
“It’s more a tactic of stopping investors from tendering into LDC’s offer and/or LDC buying on-market at or around its offer price.”
Still, Namoi said it now backed Olam Agri’s bid, switching from its earlier recommendation of LDC’s offer and joining Samuel Terry Asset Management in supporting the Singaporean company’s offer.
Ashish Govil, the head of Olam Agri’s Australian operations, said the company was confident of winning regulatory approval.
Louis Dreyfus did not immediately respond to a Reuters request for comment. ($1 = 1.4879 Australian dollars)
(Reporting by Aaditya Govind Rao & Rajasik Mukherjee in Bengaluru; Editing by Mohammed Safi Shamsi, Rashmi Aich and Savio D’Souza)
