Bidding War for Australian Cotton Producer Heats Up as Louis Dreyfus Rebuffs Olam Offer

(Bloomberg) -- Louis Dreyfus Co. won’t support Olam Agri Holding Ltd.’s offer for Namoi Cotton Ltd., as the bidding war between the two major agricultural commodities traders for the Australian producer heats up.

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LDC, which holds a 17% stake in the Australian producer, would not accept Olam Agri’s offer, it said in a regulatory filing on Friday. LDC and Olam Agri have progressively raised their bids over the last few months.

Olam’s most recent offer on Thursday valued Namoi at A$135.5 million ($89.2 million), subject to gaining support from more than half of Namoi Cotton’s shareholders. Olam said it would increase that offer if it gets backing from at least 90% of shareholders.

Read More: Olam Ups Offer for Namoi Cotton, Days After Latest LDC Bid (1)

Both companies already have a foothold in Australia’s cotton industry, which is the world’s sixth biggest. Olam owns Queensland Cotton, and has a number of ginning facilities in New South Wales and Queensland states. Meanwhile, LDC owns a cotton business and three processing plants across the country.

Namoi’s shares were trading 1.4% higher in Sydney as of 11.54 a.m., after they surged 13% on Thursday.

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