Staying with rural business, the takeover battle for Queensland Cotton stepped up a gear yesterday with a counter bid from Singapore-based Olam International which topped last week's higher offer from Louis Dreyfus.
Olam lifted its offer for QCH to $5.65 per share and is promised to pay a further 25 cents per share if it can acquire 75.1 per cent of the shares. That would take the total offer to $5.90 a share.
This is the third offer from the two groups and if you will excuse the pun, it is raining bids for a company that has, more than most, been hurt by the drought and shortage of water.
But as one of the world's major cotton exporters it is a valuable business with cotton processing plants in Australia and in the US.
Olam said in a statement that: "By setting the threshold for the second tier price at 75.1 per cent instead of 90 per cent, shareholders will have the potential to enjoy this higher price regardless of Louis Dreyfus' intentions with regard to its existing 19.9 per cent shareholding in Queensland Cotton".
Olam said it was waiving any conditions to the first tier offer and all shareholders who accept the offer will be paid a minimum of $5.65 per share in cash in full within five days of receipt of acceptance.
"Any acceptances should be on the basis of the $5.65 price as there is no guarantee or assurance that Olam will acquire a relevant interest in at least 75.1 per cent of Queensland Cotton share," the company said.
Olam said the offer had the unanimous support of the directors of Queensland Cotton.
Louis Dreyfus is the world's largest cotton trader and it has had poor relations with the QCH board leading up to pitching its bid last week.
Dreyfus' offer last week of $5.31 was worth 12 per cent more than Olam International first bid of $4.75 a share (plus 30c a share extra if it got to 90 per cent acceptances).
Dreyfus already owns 20 per cent of QCH.
QCH said the latest offer "represents an outstanding outcome for shareholders which is substantially above the valuation range of the independent expert of $4.65 to $5.13 per share, and which is 34 cents (or 6.4%) above the takeover offer by Louis Dreyfus announced last Tuesday".
