Namoi Cotton is Australia’s largest ginner, and its sites include Merah North, west of Wee Waa in north-west NSW. Photo: Namoi Cotton

GLOBAL cotton giant Louis Dreyfus Company has launched a takeover bid for Australia’s largest cotton ginner and major merchant Namoi Cotton.

LDC already owns 17 percent of the ASX-listed Namoi, which yesterday issued a statement saying it had received a non-binding offer from LDC to buy the balance for A$0.51 per share, 44pc above the last closing share price of $0.355.

“Combining Namoi’s ginning business with LDC is designed to create a strengthened and sustainable business for our grower customers and staff,” Namoi Cotton executive chairman Tim Watson said in the statement.

“This proposal builds on our existing relationship with LDC in our lint marketing and warehousing joint-venture business for the past ten years.”

Namoi Cotton was founded in 1962 as a co-operative in the Namoi Valley in north-west New South, and listed on the ASX in 1998.

Its first gin was built at Wee Waa in 1963, and it now has nine gins, including its twin Macintyre gins located at Goondiwindi in Queensland.

In NSW, its fully owned gins are located in Boggabri, Hillston, Merah North, Mungindi, North Bourke, Trangie, Yarraman, and it has joint-venture sites at Moomin and Wathagar.

Through the joint-venture Kimberley Cotton Company, Namoi Cotton is currently constructing a gin in Kununurra, Western Australia.

Australia picked a near-record 5.5 million bales of cotton this year, and Namoi is expected to have ginned close to 1.6Mb of that to maximise its capacity at all operating sites.

LDC’s gins are located at Emerald and Dalby in Qld, and Moree in NSW, and came in 2010 with its purchase of the global business Dunavant Enterprises.

Unconfirmed reports say LDC will also take over operation of the Northern Territory’s first cotton gin on track to start up Katherine next year.

LDC has advised it intends to operate all Namoi’s gins as per usual, maintain Namoi’s head office in Toowoomba, and retain the Namoi Cotton brand name.

Namoi yesterday said its board has determined it was in the best interests of the company’s shareholders to accept the LDC offer.

From December 27, the Namoi Board is able to exercise its fiduciary out to deal with potentially superior proposals from competing acquirers.

LDC’s offer is conditional on Namoi providing it with certain exclusivity rights, and Namoi has agreed
for due diligence to be conducted up to either the date a binding Scheme Implementation Agreement is signed, or 31 January 2024.

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