Namoi Cotton's second biggest shareholder, Louis Dreyfus Company, is playing hardball, flatly rejecting the latest increased share price offer from agricultural commodities rival, Olam.
Dreyfus says it won't be tempted to give up its almost 17 per cent stake in the big ginning, storage and grain logistics business - effectively blocking one of Olam's takeover strategies.
The Namoi Cotton takeover price has jumped twice this week to as much as 70 cents a share after Olam Agri Holdings yesterday trumped Louis Dreyfus' earlier 60c/share pitch with two fresh options.
Namoi's share market price jumped even higher, hitting 72c on Thursday and then 73c on Friday morning, despite LDC trying to quell interest in Olam's price maneuver.
The Singapore-based parent to Queensland Cotton has offered a starting price at 66c, if it gains at least half the shares in Australia's biggest cotton ginning company.
Its off-market takeover offer would jump to 70c/share if it got 90pc of the company's stock.
That would mean Louis Dreyfus would have to sell at least 7pc of its shares to Olam for all remaining Namoi shareholders to share in the premium offer price.
However, after digesting the Olam bid overnight, LDC's Melbourne office released a short, sharp note to the Australian Securities Exchange saying it held a 16.99pc interest in Namoi and advised it "will not accept Olam's offer" with respect to any of its own Namoi shares.
There was no indication what LDC was planning to do in response to Olam's alternative 66c price.
Namoi's biggest shareholder, Samuel Terry Asset Management, with more than 24pc of the company's stock, swiftly threw its support behind the latest Olam bid, having previously also swung to LDC.
The 66c/share Olam offer is 10pc higher than LDC's proposal early this week, 32pc better than LDC's original 50c scheme of arrangement price confirmed in January, and 86pc higher than Namoi's 35c share market price in late November before the French multinational flagged its initial takeover plans.
Louis Dreyfus has had a close 11-year involvement with Namoi Cotton, forming a lint marketing and commodities packing venture, Namoi Cotton Alliance in 2013, then restructuring the partnership so LDC took over all cotton trading and marketing responsibilities via the Namoi cotton Marketing Alliance and the two shared the NCA packing and warehousing business in 2021.
Louis Dreyfus also cemented its partnership interest as Namoi's largest shareholder at the time of the former grower co-operative's full listing on the ASX in 2017.