The deal will be done through a Temasek unit, Breedens Investments. Breedens, along with Olam's family share holders, members of its executive committee, and Arandda Investments, another Temasek unit, already hold around 52.5 percent of Olam shares.
"Breedens wishes to increase its shareholding to support Olam's strategy and growth plans for the long term," it said in a statement.
(Read more: Is Singapore the next Silicon Valley?)
The offer price of S$2.23 per share represents an 11.8 percent premium over Olam's last traded price.
Breedens is not planning at this point to take the company private, intending to Olam remain listed in Singapore unless it becomes in breach of the exchange's requirement that at least 10 percent of shares be freely floated.
Breedens is also offering to buy Olam's outstanding convertible bonds and warrants.
Olam, which is one of the world's biggest coffee and rice traders, had to be propped up by Temasek after the trading firm came under attack from short-seller Muddy Waters in late 2012 for its accounting practices.