Global commodities giant Louis Dreyfus (LDC) is looking to acquire Namoi Cotton
(ASX:NAM) with a non-binding all-cash offer of 51 cents per share, representing a substantial 41% premium over Monday's closing price of 36 cents.
Louis Dreyfus, currently the largest shareholder with a 17% stake, is also a partner in two joint ventures with Namoi.
The offer includes a one-cent-per-share dividend for Namoi shareholders, resulting in an effective offer price of 50 cents per share.
This proposed deal values Namoi at approximately $109 million and has secured exclusive due diligence rights for Louis Dreyfus for a month, according to the announcement made by Namoi to the ASX.
The offer is subject to several conditions, including the satisfactory completion of due diligence, regulatory approvals (including those from the Australian Competition and Consumer Commission, Foreign Investment Review Board, and Australian Securities and Investment Commission), and approval from Namoi shareholders at a Scheme meeting.
Namoi's board views this bid as the most preferred outcome of their strategic review and aims to create a stronger and sustainable business by combining their ginning business with Louis Dreyfus.
The Exclusivity Period for due diligence will last until either a binding scheme agreement is signed or January 31, 2024, during which customary exclusivity restrictions will apply.
The deal's potential scrutiny by the Foreign Investment Review Board is expected due to Louis Dreyfus's indirect control by Abu Dhabi sovereign wealth fund ADQ.
Louis Dreyfus already has a significant presence in the Australian grain sector, having acquired Emerald Grain Pty. Ltd. in June of the previous year.
Emerald Grain operates multiple grain storage and receival sites across New South Wales and Victoria, along with a grain export terminal at the Port of Melbourne and marketing offices in Western Australia and New South Wales.
