Singapore Government Firm Pursues Buyout of Olam International
NEIL GOUGH
HONG KONG — Olam International, a Singapore agricultural commodities company that has been targeted by the short seller Carson C. Block, said on Friday that it had received a cash buyout offer led by a Singapore government investment firm valuing it at more than $4 billion.
Temasek Holdings, the Singapore government investor, is leading a consortium of investors that already controls 52.5 percent of Olam. The buyout group is offering to pay 2.23 Singapore dollars, or $1.76, for each share they do not already own — a premium of about 12 percent to where the stock last traded.
The deal values Olam at 5.3 billion dollars and the buyout consortium, which in addition to Temasek included a group of Olam’s founding shareholders and senior management, will have to pay 2.5 billion dollars for the shares they do not already own.
In late 2012, Mr. Block’s firm, Muddy Waters Research, placed a bet that Olam’s shares would fall and launched a high-profile attack on the Singapore firm, likening it to Enron and saying it was at risk of collapsing.
Olam mounted a vocal defense of itself and its accounting measures, which Mr. Block had targeted, and responded by suing in the Singaporean courts. The suit was later withdrawn.
Olam’s shares rose only slightly after Temasek’s offer was announced Friday and were trading at about 2 dollars apiece. That was near their highest level in a year, and more than 10 percent above where Olam’s shares were trading in November 2012, when Mr. Block announced his bet against the stock.
David Heng, a director of the Temasek unit leading the buyout bid, said that, if successful, they intend to maintain Olam’s Singapore listing. The bidders “share a common investment philosophy to invest and build for the long term,” Mr. Heng said.
“We believe a successful offer will provide Olam with a stronger and more stable shareholder base to support Olam’s strategy and business model,” he added.
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