SINGAPORE – According to sources, a consortium led by Singapore’s state investment firm Temasek Holdings Pte. Ltd said it will put up 2.53 billion Singapore dollars (US$1.99 billion) to buy the rest of commodity trader Olam International.
The deal will be done through a Temasek unit, Breedens Investments. Breedens, along with Olam’s family share holders, members of its executive committee, and Arandda Investments, another Temasek unit, already hold around 52.5 per cent of Olam shares.
In a filing to the Singapore Exchange, the consortium said it intends to pay 2.23 Singapore dollars (US$1.76) a share,.
The offer price represents an 11.8 percent premium over Olam’s last traded price and values the company at $4.3 billion. The deal also includes an offer to buy outstanding convertible bonds and warrants. Olam’s shares rose to S$2.21 after the announcement.
The other consortium members are Kewalram Singapore Ltd, which created Olam and has a 20.2 percent stake, and 10 Olam management figures, including Chief Executive Sunny George Verghese, who own a combined 7.8 percent.
Breedens is not planning at this point to take the company private, intending to Olam remain listed in Singapore unless it becomes in breach of the exchange’s requirement that at least 10 per cent of shares be freely floated.
The proposal comes after a tumultuous stretch for Olam, one of the world’s leading traders in rice, coffee and cocoa, that saw it come under attack from short-seller Muddy Waters in late 2012 for its accounting practices.
Olam denied the short-seller’s claims, gained financial support from Temasek and drew up a plan to cut capital spending and debt. Its stock surged some 40 percent since late January prior to the offer announcement, reports Reuters.