BENGALURU The Australian competition watchdog will not oppose Louis Dreyfus' proposal to take over Namoi Cotton, the regulator said on Thursday, a month after it raised concerns over a similar buyout bid by a Singaporean entity.

An affiliate of Singapore's Olam Group and Dutch commodity merchant Louis Dreyfus Company (LDC) have been engaged in an international bidding war to take control of Namoi, which would help them expand their footprint in Australia.

In June, the Australian Competition and Consumer Commission (ACCC) said the proposed acquisition of Namoi by Singapore's Olam Agri raised competition concerns in the supply of cotton ginning services.

LDC in May offered to take control of Namoi Cotton for A$138.6 million (US$90.73 million).

"Olam Agri continues to engage constructively with the ACCC regarding our proposed acquisition of Namoi, and we remain confident of a positive outcome," Sunny Verghese, chief executive officer of Olam Group, said in an emailed response to Reuters on Thursday.

Shares of Namoi Cotton, an Australian cotton processing and marketing company, rose as much as 8.1% to their highest levels since May 16.

"ACCC has concluded that LDC Group would not have sufficient market power to restrict or negatively impact rival merchants' access to cotton lint," the regulator said in a statement.

The regulator, however, laid down a couple of conditions for LDC, in order to proceed with the deal.

LDC and its units need to divest their stake in Australian cotton lint classing services firm ProClass, and terminate its joint venture with sector peer WANT Cotton.

"I believe the concerns raised by the ACCC back in May were material in many respects. I find the turnaround by the ACCC somewhat confusing. It's a head-scratcher," said Brad Smoling, managing director, Smoling Stockbroking.

Namoi Cotton had earlier recommended its shareholders to accept Singapore Olam's A$144.9 million takeover offer.

  - Reuters