Olam International has received a takeover approach backed by Temasek, Singapore’s state investment agency, that values the agribusiness at S$5.3bn (US$4.2bn).

Breedens, a wholly-owned subsidiary of Temasek, is leading a consortium that includes fellow Temasek investment arm Aranda Investments, the Olam founding family and ten members of the Olam executive committee.

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The consortium already holds a 52.5% stake in Olam.

The all-cash offer of S$2.23 a share represents a near-12% premium to yesterday’s closing price of S$2, the last day of trade before the bid was announced. Olam’s shares rose 11.78% on the announcement to close at S$2.23 in Singapore this evening.

The deal also includes an offer to buy outstanding convertible bonds and warrants.

Breedens said it aimed to provide Olam with a “stronger long-term shareholder base” to support Olam’s “strategy and growth plans over the medium to long term”.

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Olam faced investor criticism last year, with US short seller Muddy Waters accusing the Singapore-based company of booking profits on transactions before the financial implications were clear. Olam refuted the groups claims and launched a strategic review, which included goals like accelerating free cash flow generation and reducing gearing.

Responding to the bid, Olam’s board said it would appoint its own independent financial advisors to guide shareholders.

“In the meantime, shareholders, bondholders and warrantholders are advised to exercise caution when dealing in their shares, convertible bonds and/or warrants (as the case may be) or otherwise refrain from taking any action… which may be prejudicial to their interests, until they or their professional advisers have considered the information and the recommendations of the independent directors as well as the advice of the IFA,” Olam said.