NAMOI Cotton’s independent directors have today recommended shareholders accept the off-market takeover bid from Louis Dreyfus Company.

The announcement comes just over three months after the company advised shareholders to accept the competing offer from Olam Agri.

In a statement released to the ASX, Namoi said recent developments, including Foreign Investment Review Board and Australian Competition and Consumer Commission approvals,  made LDC’s bid more attractive.

The LDC takeover offer was now considered “unconditional” meaning if shareholders accept the proposal, they have certainty of receiving cash consideration for each share they sell.

This recommendation was made despite LDC offering three cents less per share than Olam’s bid of 70c per share.

“The LDC Offer provides an opportunity to realise certain value for your Namoi shares which may not be achieved if the LDC offer does not proceed,” the release said.

“[E]ach independent director who holds or controls Namoi shares intends to accept the LDC Offer in relation to those Namoi shares (in the absence of a superior proposal and subject to the independent expert continuing to conclude that fair and reasonable).”

Namoi said it had obtained independent advice from BDO Corporate Finance which has backed LDC’s proposal over Olam.

BDO had previously recommended shareholders accept Olam’s proposal.

It had since concluded that LDC’s lower bid was “fair and reasonable” and on the higher end of the estimated value of Namoi shares in the range of 42-78c.

In its report, BDO said there was “no certainty” for shareholders if they choose not to accept LDC’s offer.

Currently, Olam was awaiting ACCC and FIRB approvals with the ACCC announcing that its final decision will be delayed until October 31.

“There is no guarantee the Olam takeover offer will become unconditional,” the BDO report said.

“Based on the information available to us… including the LDC takeover offer becoming unconditional, we no longer consider the Olam takeover offer to be superior.”

STAM support needed

LDC’s shareholdings in Namoi have increased to 20.24pc, still well short of the more than 50 per cent control required to become the major shareholder.

Namoi’s largest shareholder Samuel Terry Asset Management has yet to put its support behind LDC after previously favouring Olam’s bid.

STAM owns 24.5pc of Namoi shares and could potentially end the takeover contest if it opts to sell its stake.

LDC’s offer closes on Friday, while Olam had recently extended its bid to October 10.

Source: Namoi, ASX