Olam Agri makes new offer for Australia's Namoi as bidding war escalates

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Olam Agri makes new offer for Australia's Namoi as bidding war escalates

Olam Agri raises offer to A$0.70 per share

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Olam Agri offer 3 Aussie cents above rival LDC bid

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Namoi shares hit highest in nearly 25 years

By Roshan Thomas and Megha Rani

May 8 - Olam Agri on Wednesday increased its offer for Australia's Namoi Cotton as an international bidding war heats up between the Singapore-based agribusiness and Dutch company Louis Dreyfus Co .

Olam Agri will now offer Namoi shareholders A$0.70 apiece, a three cents lift from Louis Dreyfus' last bid, valuing the Australian firm at A$144.9 million , the Singapore-based firm said in a statement.

Namoi shares rose as much as 5.5% to A$0.77 earlier in the day, hitting a near 25-year high. Shares were last up 1.4%.

The affiliate Singapore's Olam Group had offered A$0.66 a share for Namoi last week and had indicated it would bump that up to A$0.70 a share if it secures at least 90% support from the target's shareholders.

Rotterdam-based LDC, which already owns 17% in Namoi, refused to accept Olam's new bid a day later, leading to the deepening of the bidding war. LDC and Olam have been bidding back and forth to gain control of Namoi since January this year.

"The market appears confident that there will be another bid from Louis Dreyfus", said Henry Jennings, senior market analyst at Marcus Today.

"LDC, to get recommendation will need to increase offer price up to A$0.80 per share," he added.

The off-market deal requires Foreign Investment Review Board and Australian Competition and Consumer Commission approval and will test the regulator's appetite in letting either of the deals pass.

FIRB has taken a cautious approach to overseas buyers acquiring Australian agricultural assets, in the past.

The deal for both the bidders would help expansion of their footprint Down Under. Olam already owns ginning facilities in parts of the country, whereas Louis Dreyfus previously acquired U.S. based Dunavant Enterprises' cotton operations in Australia.

This article was generated from an automated news agency feed without modifications to text.