Global agriculture business Louis Dreyfus Company has increased its shareholding power in Namoi Cotton Limited amid a takeover tug-of-war which also includes Olam Agri - the global parent company of Queensland Cotton.
Namoi Cotton Limited manages Australia’s largest network of cotton gins.
LDC’s voting power with Namoi Cotton is now at 18.02 per cent, up from 16.99 per cent. This is up by over 2 million shares.
The latest development comes after Namoi told shareholders to reject LDC’s all-cash takeover offer of $0.67 per share.
In the same swoop, the cotton ginner recommended that shareholders take no action against global agriculture business Olam Agri Holdings Limited’s own all-cash takeover offer of $0.70 per share, saying it is waiting for the company’s target statement before Namoi’s directors decide on the course of action.
It also comes after the ACCC published its own statement of issues outlining preliminary competition concerns with LDC’s proposed acquisition of Namoi.
The consumer watchdog is concerned that the proposed acquisition would be likely to substantially lessen competition in the supply of cotton ginning services in the north of Western Australia and Northern Territory and the supply of cotton lint classing services.
The ACCC is also considering whether the proposed acquisition may substantially lessen competition in the marketing of cotton lint and seed.
“If this acquisition proceeds, LDC will be involved in operating the only two cotton gins in the north of Western Australia and Northern Territory,” ACCC commissioner Stephen Ridgeway said. “We are concerned it would result in LDC being able to reduce competition between these two cotton gins, which may result in higher prices or reduced service levels for ginning services.
“Growers benefit from competition between cotton gins, and once both are operational, the Katherine gin will be by far the closest competitor to the Kununurra gin.”