Olam Agri plans to acquire Australia’s cotton-ginning giant, Naomi Cotton

Under the NBIO, Namoi shareholders would stand to receive total cash payments of A$0.591 per share.

Olam Agri Holdings (OAHL), a subsidiary of Olam Group, has officially submitted a non-binding indicative offer (NBIO) for the acquisition of all shares in Namoi Cotton (Namoi), the largest cotton ginning company in Australia, it said in a local bourse filing.

Namoi, a public company listed on the Australian Securities Exchange, had previously entered into a Scheme Implementation Agreement with Louis Dreyfus Company Asia on 19 January, to acquire the remaining 83% of Namoi Shares that it does not currently own, for a cash consideration of A$0.51 per Namoi Share.

Under the NBIO put forth by OAHL, Namoi shareholders would stand to receive total cash payments of A$0.591 per Namoi Share, comprising a cash consideration of $0.58 per Namoi Share and a permitted special dividend of A$0.01 per Namoi Share.

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This suggests a total consideration, including the special dividend, of approximately A$122m.

Additionally, the NBIO includes an alternative proposal by OAHL for an off-market takeover bid, offering A$0.57 per Namoi Share, totalling approximately A$118m, inclusive of the A$0.01 permitted special dividend. Both proposals, if pursued, will be subject to regulatory and other conditions.

In terms of financing, if the Proposed Transaction proceeds, Olam Group intends to utilize a combination of existing cash reserves and external debt funding.

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