Australia’s largest cotton ginning company Namoi Cotton Limited has received an off-market all-cash takeover offer from the local subsidiary of global agricultural firm Louis Dreyfus Company (LDC).
The takeover offer is for the remaining 83 per cent of issued shares in Namoi that it does not currently own on a total cash consideration of 60 cents per share.
Key requirements of the offer include a minimum 50.1 per cent acceptance and approvals from the ACCC and the Foreign Investment Review Board.
Namoi has agreed to certain key terms with LDC, including a break fee payable by Namoi in certain circumstances and a notification and matching right in respect of competing proposals.
Namoi’s independent directors intend to recommend that Namoi shareholders accept the takeover offer, in the absence of a superior proposal and subject to an independent expert concluding - and reportedly continuing to conclude - that the offer is fair and reasonable to Namoi shareholders.
The LDC Group currently has a 16.99 per cent shareholding in Namoi and has been a long-term partner of Namoi and its shareholders, employees, cotton growers and joint venture partners via its shareholding, and interests in the Namoi Cotton Alliance NCA and the Namoi Cotton Marketing Alliance joint ventures.
“We are pleased to announce our cash offer for the remaining Namoi shares – a strategic move that underscores our conviction in the potential of Australian agriculture,” LDC’s CEO Michael Gelchie said.
“This decision is aligned with our commitment to expanding LDC’s presence and service offering in the country, where the group has been active for over 110 years, with growing merchandizing and processing operations in cotton, grains and oilseeds.”
Louis Dreyfus Company was founded in 1851 as a merchant and processor of agricultural goods.
It is active in 100 countries, employing 17,000 people worldwide, with 80 million tonnes of product produced annually.
As part of the transaction, Blackpeak Capital is acting as financial advisor to Namoi, while KWM is acting as legal advisor to Namoi.