Tasmanian salmon grower Tassal rejects $1bn takeover bid

Canadian aquaculture giant Cooke may need to lift its offer for Tassal above $5 per share if it is to succeed in its billion dollar pursuit of the ASX-listed salmon producer, market watchers have said.

Tassal on Tuesday announced it had rejected a fresh proposal from Cooke worth $4.85 per share, valuing the business at $US720 million ($1.04 billion). The latest bid follows earlier offers, which were also rejected, worth $4.67 and $4.80 respectively. Tassal’s share price finished Tuesday’s trading session up 16.1 per cent at $4.61.

Australia’s largest Tasmanian salmon producer Tassal Group has rejected another takeover bid by Canada-headquartered aquaculture giant Cooke Inc.Credit: Bloomberg

“[Tassal’s] board evaluated these proposals and chose not to engage in relation to them,” the salmon grower said in an ASX statement.

Tassal’s board and the company’s financial adviser, reviewed the $4.85 per share proposal but said it found it wasn’t an accurate reflection of the company’s value and not in shareholders’ interests.

“Accordingly, the company’s board has determined not to engage with Cooke regarding the indicative proposal,” the statement said. “The company’s board of directors believes Tassal has an attractive independent future and is well positioned to deliver growth in shareholder value.”

But as the global economic outlook becomes gloomier, Saxo Bank Australian market strategist Jessica Amir said Tassal’s may not be able to resist a further approach, if it were made

“The reality is ... the biggest consumer of commodities, and of course seafood, China, is not expecting recovery until 2023,” she told the Herald and The Age.

“It surely would be in the best interest of shareholders to move forward with this now, given its shares probably won’t be making a recovery back to 2019 highs.”

That year, Tassal’s share price hit an all-time high of $5.19 but came crashing down when the pandemic hit. It has struggled to push above $4 ever since.

But the company has performed strongly during the financial year ending this week and is in “the best position it’s been in several years,” according to Amir, who expects Cooke to come back to the table for a fourth time with a higher offer.

“I think Tassal might [say], ‘We want to see something over the $5 mark, potentially $5.20, and then we’ll talk’,” she said.

“If it’s going to be higher than $4.85, that would be a pretty big win.”

Tassal’s statement comes a day after Cooke revealed it had acquired a 5.4 per cent stake, making it a substantial shareholder.

Melbourne dealmaker and former Tassal Group chairman David Williams purchased more than 10 million Tassal shares across last month which turned out to be on Cooke’s behalf.

Cooke previously attempted to acquire Huon Aquaculture but ultimately lost out to Brazilian-owned JBS, a meat and food processor.

JBS’ takeover bid for Huon, which valued the company at $550 million including debt at $3.85 per share, was first announced in August last year and received the green light from shareholders in early November.

Mining magnate Andrew ‘Twiggy’ Forrest also made his own play for Huon at the time. He amassed an 18.5 per cent stake to pressure the company to move their salmon pens away from Macquarie Harbour, which he described as “environmentally destructive”.

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