(Bloomberg) -- Namoi Cotton Ltd. has backed a higher takeover bid from Olam Agri Holdings Ltd., with the crop trader entering into agreements with two major shareholders to boost its stake in the Australian company.

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Olam’s increased all-cash offer values Namoi at A$154 million ($104 million), which is 12% more than a rival bid from Louis Dreyfus Co. — a proposal that Namoi’s independent directors had recommended just two days ago.

The rival crop traders have been jostling to buy Namoi since January to gain a bigger foothold in Australia, the world’s sixth-largest cotton producer. The Louis Dreyfus bid is marginally lower and due to close Friday, but the company has built up a 21% stake in Namoi, presenting a significant hurdle for Olam.

Namoi shareholders Samuel Terry Asset Management Pty and Harvest Lane Asset Management Pty have backed the Olam bid and agreed to sell shares in the company to the trader, increasing its stake to around 16%.

Louis Dreyfus was not immediately available for comment.

Namoi offers supply diversity and processing heft close to manufacturing hubs such as Vietnam and Bangladesh, where cotton can be used to make clothes and homewares. The Australian company operates about a quarter of the nation’s processing plants, known as gins.

The takeover offers have raised some competition issues, but the Australian Competition and Consumer Commission said last month that it wouldn’t oppose the Louis Dreyfus bid after the crop trader agreed to measures that would allay some concerns. The ACCC continues to assess the Olam proposal.

Olam — which raised its bid for Namoi to 75 Australian cents per share from 70 cents — remains confident that it will receive ACCC approval, Ashish Govil, the head of the trader’s Australian branch said in an emailed statement on Friday. Concentration of gin ownership is less of an issue due to the competitive nature of acquiring cotton to process, he added.

Namoi shares rose as much as 5.2% in Sydney — the biggest intraday gain since Aug. 1 — before closing slightly lower at 70.5 Australian cents.

(Updates throughout.)

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