Tassal Group, the Australian salmon and shrimp producer, has rejected today, Tuesday, the takeover offer made yesterday by the Canadian Cooke to acquire 100% of its shares. The non-binding indicative proposal offered A$4.85 per share, an offer that the Canadians described as an “attractive premium”. The Tasmanians, for their part, have described it as “incomplete and conditional”. This is the third time in just over a month that Tassal has rejected a Cooke proposal.
Cooke’s third upward attempt
Yesterday’s, June 27, is Cooke’s third attempt to take over Tassal Group. The offer of A$4.85 per share represented a premium of 35.1% over the closing price of Tassal’s shares on May 26th, 2022 of A$3.59 (the last trading day before the date of the first indicative proposal), and 36.2% to the VWAP for the 30 days to and including 24 June 2022 of A$3.56. However, the proposal has once again been rejected. “The Company’s Board evaluated those proposals and chose not to engage in relation to them”, said the Tasmanian company in its statement to the Australian Securities Exchange (ASX).
WeAreAquaculture has contacted Cooke to know its opinion about this rejection and the company has referred us to its statement of yesterday where it described it as “particularly attractive given the significant increase in risk-free rates and the cost of debt since the first non-binding indicative proposal given to the Tassal board on Thursday, May 26th, 2022”. And added, “Cooke believes its proposed cash consideration of A$4.85 per Tassal share is an attractive premium considering Tassal’s salmon volumes have been maximised given restrictions on new marine farming leases”.
An opinion the Tassal Board does not share. “The indicative proposal does not reflect the fundamental value of the business and is not in the best interests of shareholders”, they said, and, consequently, “the Company’s Board has determined not to engage with Cooke regarding the indicative proposal”, so have informed the shareholders that no action is necessary.
Historic stock market rise for Tassal Group
The rejection of Cooke’s takeover offer by Tassal has triggered a sharp rise in the stock market value of its shares, which, according to MarketScreener, have risen 16%, to A$4,610 per share, recording the best day in its history.
This result would reinforce the position stated by the Tasmanian company in its announcement. “The company’s Board of Directors believes Tassal has an attractive independent future and is well positioned to deliver growth in shareholder value. The Board of Directors and management team remain focused on building on the company’s long history and delivering on our strategic objectives”, it said.
On the other hand, Cooke remarked that the company “is keen to undertake the transaction on a friendly basis with an endorsement from Tassal’s board of directors, and therefore has proposed that the transaction occur by way of a Tassal scheme of arrangement”. However, it also remembered that “the proposal is subject to limited conditionality and, importantly, is not subject to Cooke being granted due diligence access”.
About Tassal Group and Cooke
Tassal is an Australian company based in Tasmania more than 30 years ago. Listed on the Australian Securities Exchange (ASX), it is a vertically integrated salmon and shrimp grower and processor for both the Australian domestic and export markets. The company employs over 1,700 people in Tasmania and Australia.
Canada-based seafood producer Cooke has Atlantic salmon farming operations in Atlantic Canada, the United States, Chile, and Scotland; seabass and seabream farming operations in Spain; seafood and wild fishery divisions in North and South America; and one of the largest premium shrimp farms in Latin America. The company now has a global workforce of 10,000 employees in 10 countries, mainly located in rural areas.