Tassal recommends shareholders to accept $1.1 billion takeover bid from Canadian seafood giant Cooke

The last remaining major Australian-owned salmon producer appears to be going into foreign hands after Canadian aquaculture company Cooke increased its bid for Tassal.

Tassal told the Australian Securities Exchange it has recommended that shareholders accept Cooke’s latest offer of $5.23 per share, which values ​​the company at $1.1 billion.

Cooke has spent months trying to buy Tassal and has filed three failed takeover bids, the last of which was valued at $4.85 a share in June.

In a statement to the ASX, Tassal chairman James Fazzino said the latest offer followed months of “constructive engagement by the Tassal board with Cooke to secure additional value”.

“Tassal’s board of directors believes that the revised proposal reflects appropriate long-term value to the company, and is unanimously of the opinion that the arrangement is in the best interest of Tassal’s shareholders,” he said in the statement.

Tassal chief executive Mark Ryan said the company was a “natural match” with Cooke, saying the acquisition “will accelerate our goal of becoming one of the world’s most transparent and sustainable protein producers”.

Canadian seafood businessman Gifford Cooke, and his sons, Glenn (left) and Michael.(Twitter: Cooke Seafood)

Deal to vote in November

Shadforth’s Financial Analyst Sam Baker said it was incredibly likely the deal would be approved when shareholders vote on it in November.

“Given the roughly 50 percent premium to Tassal’s share price prior to any approach, it seems very likely that this will now continue,” he said.

“Cooke Aquaculture has already received approval from the Foreign Investment Review Board, so at this point the only hurdle is the shareholder vote that will take place.

“But really, at this point it seems very likely that it will be passed by shareholders.”

Making sales affect transparency

The potential acquisition of Tassal follows foreign acquisitions of Australia’s other two major salmon companies.

New Zealand seafood giant Sealord bought Petuna in 2020, while Brazil’s JBS completed its acquisition of Huon Aquaculture last year.

Salmon jumps above the water in a fish farm fence.
The looming sale comes after Tassal competitor Huon Aquaculture was bought by Brazilian company JBS Foods.(tassal)

Mr Baker said there were issues with public reporting arising from the fact that all three companies were no longer listed on the ASX.

“If Tassal is acquired by Cooke Aquaculture, there will be no obligation as a private company to publicly report to the market on financial results or even on Tassal’s financial performance,” he said.

“This is clearly the same with the other two Tasmanian salmon companies that in Australia have no formal reporting on their operations and even on any events or incidents occurring in some of their farming operations.”

Tassal also reported its annual financial results Tuesday, with a net operating profit of $64 million, up 32 percent from last year due to higher global salmon prices.

Salmon company Tassal defends its farming practices
Industrial fish farming has been a hot topic in Tasmania for years because of environmental concerns.(ABC News: Michael Cavanagh)

Environmentalists are concerned

Alistair Allan, champion of the Bob Brown Foundation’s anti-fish hatchery, said the likely sale “meaned more and more disaster” for Tasmania’s marine environment.

“The salmon industry has to outgrow, they have to retreat, and this [the proposed sale] points to more and more growth,” he said.

“These huge aquaculture companies have to harm the environment as part of their business model, and it’s ingrained as part of their industries.”

Mr Allan also said he was concerned about a lack of transparency as a result of the likely sale.

“We don’t know much about this company, we don’t know what their plans are for the industry in Tasmania and it takes away the idea that this was once a local Tasmanian industry, it is now a foreign owned industry with huge profits that will interests of Tasmania,” he said.

Cooke Aquaculture has been approached for comment.

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