THE TUSSLE for control of Namoi Cotton remains a two-horse race with Olam Agri and Louis Dreyfus Company showing no signs of pulling out of the contest.

Olam Agri continues as the preferred bidder with a superior offer of 70 cents per share and support from Namoi’s independent directors and the largest shareholder, Samuel Terry Asset Management.

However, the Singaporean agribusiness and parent company of Queensland Cotton is significantly behind LDC in voting power and shareholdings.

In a statement released to the ASX today, Olam reported an increase in voting power to 6.02 percent, up from 4.6pc on June 21.

Olam held no stake in Namoi before making the takeover bid and has been steadily increasing its holdings from early June.

In contrast, LDC is a long-standing Namoi shareholder and as of June 17 has 19.02pc power voting.

Despite offering 3pc less per share than Olam, LDC’s holdings have also increased since the initial binding agreement was signed in January.

At the start of 2024, LDC’s Namoi shareholding was 16.99pc, which had grown to 18.02pc as of May 27.

Other share movements

Alongside the two bidders, STAM and Sydney-based investment firm, Harvest Lane Investment Management, have also shown continued interest in Namoi in recent months.

STAM upped its interest by over 3pc due to on-market buys in March and April.

Newcomer Harvest Lane became a “substantial holder” of Namoi shares on June 24 when the firm purchased 5.35pc voting power.

The investment fund targets companies during times of corporate activity such as mergers, asset sales, demergers, and restructuring.

Harvest Lane reportedly paid between 48.5c and 76c for securities during the four months between February and June.

Future of Namoi

Both Olam and LDC have indicated that they would exercise the option to compulsorily acquire all outstanding Namoi shares if either reached the threshold, namely of holding a stake of at least 90pc in the company.

The takeover bidders have both extended offers with Olam’s now set to expire on August 13 and LDC’s bid to end on August 2.

LDC has opted not to increase its offer since its last bid was received on May 7, and without the support of STAM, looks unlikely to receive a 90pc share.

Similarly, Olam’s chances are also doubtful with LDC on May 3 announcing that it won’t accept the offer from the rival bidder.

If either company acquires more than 50pc of Namoi shares, it could as the major shareholder gain the power to change Namoi’s board, constitution, strategic direction, and capital management.

The Australian Competition and Consumer Commission has voiced its concerns about both Olam’s and LDC’s bids for Namoi, given that they are already both sizeable presences in Australia’s cotton-processing sector.

Source: ASX