June 24, 2011


Olam's acquisition of NZFS delayed



Singaporean commodities giant Olam International's attempt to obtain 100% ownership of New Zealand Farming Systems Uruguay seems to have delayed with less than a week to go before the due date of the acceptances.


Olam remains short by a minimum 5.8% acceptance.


Olam needs 90% acceptances to allow it to compulsorily acquire the remaining 10% of shareholders, but it has not updated the market since Thursday (Jun 23) last week when it confirmed it had reached 84.2% acceptances.


A block of shareholders, holding more than 10% of the Uruguayan dairy farm company, have resisted selling until Olam upped its 70c-a-share offer, which Olam has said it will not raise.


A broker said that with no disclosure notices issued in recent days, Olam might have gained only a small number of acceptances since last week.


"Olam appears to be struggling and are not travelling well towards the 90% threshold they need."


Olam extended its acceptances deadline from Tuesday (Jun 14) last week to Wednesday (Jun 29) next week, noting to shareholders they could be called on to support a large capital raising, in a range of US$110 million-115 million required for more development.


Once Olam's NZD37.6 million (US$30.6 million) takeover bid lapses, it could potentially come back to the market and make another offer to the 10% of hold-out shareholders.

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