(Bloomberg) -- Independent directors at Namoi Cotton Ltd. recommended that shareholders accept the most recent takeover bid from Louis Dreyfus Co., which raised its offer earlier in the day and said it had acquired nearly half of the Australian company’s shares.
The recommendation comes after Olam Agri Holdings Ltd. — which has been jostling with Dreyfus to buy Namoi since January — said it would not extend its bid past a deadline next week. Dreyfus now looks set to emerge victorious, given Olam will likely struggle to get support from more than half of Namoi shareholders, winning the Rotterdam-based company a bigger foothold in Australia, the world’s sixth-largest cotton producer.
Dreyfus increased its offer to A$0.77 ($0.53) a share and said it now owned 47.66% of Namoi, according to an exchange filing on Tuesday. The bid, which values the cotton processor at A$158 million, is scheduled to close on Oct. 9. Samuel Terry Asset Management, Namoi’s biggest shareholder, had accepted its offer, Dreyfus said.
Singapore-based Olam said shortly after that it wouldn’t extend its bid of A$0.75 a share beyond Oct. 8. That proposal had been recommended by Namoi’s independent directors and major shareholders last month, but it ran into regulatory difficulties.
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Namoi shares rose 8.5% to A$0.77 in Sydney, matching the LDC offer. The stock has rallied more than 60% this year.
Dreyfus and Samuel Terry declined to comment, while Namoi didn’t reply to requests for comment.
--With assistance from Harry Brumpton.
(Updates with details on directors’ recommendation from second paragraph. An earlier version corrected the currencies of the offers to Australian cents.)
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