(Repeats for additional readers with no changes to headline or text)

* S$2.23 per share offer is 12 pct premium to last traded price

* Breedens, other Temasek parties already own 52.5 pct

* Temasek-led group says intends to keep Olam listed

* Analysts expect Temasek to take the company private

By Rachel Armstrong and Michael Flaherty

SINGAPORE/HONG KONG, March 14 (Reuters) - A Temasek-led shareholders group has offered to pay $2.1 billion in cash for shares in Olam International Ltd OLAM.SI they don't already own, putting the heft of the Singapore state investor behind the commodity trading firm's weak balance sheet.

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 TEM.UL 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.

A deal would help re-energise Olam amid a spate of acquisitions in the commodities sector including recent moves by Chinese trader COFCO Corp CNCOF.UL to grab control of the agribusiness arm of Singapore-listed Noble Group Ltd NOBG.SI as well as another overseas grain operation.

Analysts expect Temasek TEM.UL to eventually take Olam private, which would be in keeping with its strategy of increasing the unlisted portion of its $170 billion portfolio of companies. Private firms accounted for 27 percent of its portfolio in March 2013, up from 22 percent two years earlier.

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A Temasek unit, Breedens Investments, is leading a consortium that includes Aranda Investments and members of Olam's executive committee, which collectively own 52.5 percent of the commodities trader.

The offer price of S$2.23 per share 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$2.22 after the announcement.

"A takeover will put Temasek's AAA rating squarely behind Olam and hopefully allow them to repair their weak financials," said Michael Dee, a former senior managing director at Temasek Holdings.

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Graphic on Olam ownership: http://link.reuters.com/raf67v

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DEBT BURDEN

Dee noted that Olam continues to be over-leveraged and that last year's rights offering to Temasek and others had only added more debt and interest expenses.

While the deal would significantly reduce the amount of public Olam shares on the market, Breedens is not planning at this point to take the company private and will keep it listed unless it breaches the Singapore exchange's requirement of at least a 10 percent free float, according to the offer statement.

But some analysts said they expect Olam would eventually be taken private. In addition to allowing the commodities firm to fix its balance sheet away from public scrutiny, it would also take away the pressure to report quarterly earnings for a volatile sector.

Olam bonds rallied on the news, with both its U.S. dollar and Singapore dollar bonds up 3-4 points on average. Long dated bonds have risen the most in price terms with the bonds due 2020

SG053128408= at 105-107, trading up from around par before the announcement.

As of June last year, Olam had long-term debt of S$5.9 billion compared with S$4.3 billion at the end of June 2012.

VALUATION

According to a Maybank Kim Eng research note, the offer values the company at an "attractive" 1.4 times price to book, compared to a ratio of 1 times for rivals Noble and Wilmar International Ltd WLIL.SI on a fiscal 2014 basis.

Olam last month posted a 12.5 percent drop in second-quarter profit on weaker sales and commodity prices. But Olam, a leading global coffee supplier, said a rebound in coffee prices would boost the sector's performance for the rest of the year. ID:nL3N0LJ1I0 .

For cocoa and coffee beans, Olam is amongst the world's largest originators and shippers and it is also one of the biggest cotton companies in the world.

The company started its grains business in 2008, mainly focusing on wheat but it is slowly expanding into other products such as corn, barley, sorghum and rye. It is also among the top five traders of dairy ingredients in the world.

Credit Suisse Group AG CSGN.VX , DBS Group Holdings Limited

DBSM.SI and United Overseas Bank Ltd UOBH.SI are acting as advisors on the deal.

"Temasek knows the company well. It has been a supportive investor for many years," said Standard Chartered analyst Adrian Foulger, who had an "outperform" rating on Olam. "It could be a simple case that they are very comfortable with Olam and the investment."

($1 = 1.2661 Singapore Dollars)

(Additional reporting by Saeed Azhar, Rujun Shen and Naveen Thukral in Singapore, and Umesh Desai in Hong Kong; Editing by Edwina Gibbs)

((rachel.armstrong@thomsonreuters.com)(+65 64035665)(Reuters Messaging: rachel.armstrong.thomsonreuters.com@reuters.net))

Keywords: OLAM TEMASEK/