The battle for control of Namoi Cotton (ASX:NAM) is heating up.
On Thursday, the Australian Competition and Consumer Commission (ACCC) said it would not oppose Louis Dreyfus' proposal to acquire Namoi Cotton. This comes a month after the regulator raised concerns about a similar bid from Singapore-based Olam Group.
However, Olam has rejected the ACCC's findings, claiming its bid will not impact competition and urging Namoi shareholders to ignore the regulator's decision.
Dreyfus and Olam have engaged in what appears to be a takeover duel, characterized by escalating bids, revised offers, and scrutiny from the ACCC.
In June, the ACCC expressed competition concerns about Olam Agri's proposed acquisition of Namoi, specifically regarding the supply of cotton ginning services. The regulator also raised concerns about the impact on competition from Dreyfus, leading to the conditional approval announced on Thursday.
Dreyfus must divest its stake in Australian cotton lint classing services firm ProClass and terminate its joint venture with industry peer WANT Cotton.
"The ACCC has concluded that the LDC Group would not have sufficient market power to restrict or negatively impact rival merchants' access to cotton lint," the regulator stated.
Namoi Cotton previously recommended its shareholders accept Singapore-based Olam's $144.9 million takeover offer.
In a statement to the ASX, Olam's lawyers asserted that the company "continues to believe there are sound reasons why its proposed acquisition of Namoi will not substantially lessen competition."
"Olam Agri remains committed to engaging closely and constructively with the ACCC to address its potential concerns, including through proposed divestments. Olam Agri encourages Namoi shareholders to refrain from accepting the offer from Louis Dreyfus Company Melbourne Holdings Pty Ltd pending the ACCC's final decision on Olam Agri's proposed acquisition. As of this document, the ACCC's anticipated decision date for Olam Agri's bid is August 22, 2024.
"Olam Agri reiterates the Namoi Independent Directors' unanimous recommendation that Namoi shareholders ACCEPT the Olam Agri Offer, provided there is no superior proposal and the Independent Expert continues to deem the Olam Agri Offer fair and reasonable for Namoi shareholders."
Meanwhile, Dreyfus' lawyers issued a separate statement on Thursday confirming that a key condition of their bid—ACCC approval—had been met.
So, a standoff?
