Tassal said it had rejected two previous buyout proposals in the past month from Cooke

Tassal rejects $1b bid from Canada’s Cooke

The following is an excerpt from an article published by the Financial Review:

Canadian aquaculture group Cooke Inc argues its $1.04 billion takeover proposal for Tasmanian salmon farmer Tassal offers a decent premium because Tasmanian government restrictions on granting new marine leases are helping to bolster salmon volumes at the target company.

Tassal has rejected its third buyout proposal from Cooke in a month and is refusing to engage in talks. It says the $4.85 per share price undervalues the group even though it was at a 22 per cent premium to the closing price of $3.97 before the proposal became public.

Tassal shares climbed by 16.1 per cent on Tuesday to close at $4.61.

The Canadian group, which is family owned and operates in 10 countries, has shown it is patient and strategic, having made an initial offer for Tassal in 2010. The Cooke group generates annual revenues of $2.4 billion Canadian dollars ($2.7 billion) and its latest overtures come as tighter regulations are being applied to the salmon farming industry in Tasmania after intense criticism from environmental groups.

A moratorium is in place on granting new marine leases for salmon farming, and the details of a 10-year plan to start from January 1 are being finalised late this year. The government has signalled one of the principles will be no net increase in leased farming areas in Tasmanian waters beyond current allocations.

Tassal’s board said on Tuesday the company had an “attractive independent future” and would be better off going it alone.

Cooke has been trawling for acquisitions in Australia and last year was interested in Tassal rival Huon Aquaculture. It was eventually acquired for $425 million by Brazilian food giant JBS, which has a core business of meat processing and made its first expansion into fish farming with the Huon acquisition.

Cooke Inc said in a statement it wanted to pursue a deal with Tassal “on a friendly basis”.

The company also said the offer represented an attractive premium “considering Tassal’s salmon volumes have been maximised given restrictions on new marine farming leases”.

Entities related to Cooke and chief executive Glenn Cooke put in a substantial shareholding notice to the ASX on Monday afternoon, revealing they had acquired a 5.4 per cent stake in Tassal, as reported by Street Talk.

Tassal said it had rejected two previous buyout proposals in the past month from Cooke of $4.67 and $4.80 a share. Those proposals were not made public, with the Tassal board dismissing them behind closed doors. The first was made on May 26.(continues...)

Author/Source: Simon Evans/Financial Review | Read the full article by clicking the link here

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