David Williams reels in Cooke’s $1.7bn takeover of Tassal

Investment banker David Williams can say he has effectively bought Tassal twice - once for $42.5m in 2002 and again for $1.7bn this year after he advised Canada’s Cooke on the takeover.

Secret weapon: food and beverage corporate adviser David Williams, who worked with Cooke on the takeover deal. Picture: Arsineh Houspian

Tassal shareholders have overwhelmingly backed a $1.7bn takeover of the salmon producer from Canadian seafood giant Cooke.

It marks the end of a 20-year turnaround at the Tasmanian group, which entered administration in 2002 and was floated on the ASX a year later at 50c a share.

The company will now be removed from the ASX boards later this month after 96 per cent of shareholders voted in favour of Cooke’s fourth and final bid of $5.23 a share on Thursday.

It has been a test of patience for Cooke - which first approached Tassal in 2010 and made its first offer for the company in 2011. When it contacted the board this year, it was armed with a secret weapon: David Williams.

Mr Williams, who runs boutique investment bank Kidder Williams, can say he effectively bought Tassal twice. Once for $42.5m after the group fell into administration and again for $1.7bn after he advised Cooke on the deal.

Tassal chair, former Incitec Pivot chief executive James Fazzino, said it was a “significant day in the history of Tassal”, with Cooke’s bid representing a 49 per cent premium and the “best interests” of shareholders.

His comments came after managing director Mark Ryan - who was appointed as receiver in 2002 and stayed with the company after its listing the following the year - said in August there was no greater external validation than an appropriately-priced takeover bid.

“If you look at a 49 per cent premium, I think it’s a good premium from when it started, and if I look at where we listed at 50c it feels pretty good to get it up to $5.23,” Mr Ryan said.

A court hearing has been scheduled for Tuesday to approve the scheme. If it gets the green light, the takeover will become effective on November 21, with shareholders paid $1.1bn or $5.23 cash a share. The deal also includes about $600m of Tassal’s debt.

It comes after Cooke unsuccessfully made a play for Tassal rival Huon, which was ultimately sold to Brazilian firm JBS for $424m last year.

Cooke has turnover of some $2.7bn, salmon farms in Canada, US, Chile and Scotland, and has 10,000 employees. It is understood to be wanting to increase its geographic diversification further to help reduce the risks such as adverse weather and disease.

Cooke Aquaculture chief executive Glenn Cooke.

Cooke chief executive Glenn Cooke made a direct pitch to Tassal’s 10 biggest shareholders in late June via a phone call described as a “meet and greet”. Mr Cooke told the Tassal shareholders on the call that the company faces limited growth prospects, and under Cooke’s ownership it could take it to the new markets and the next level.

He also gave a summary of Cooke’s history and operations, which includes salmon farms in Canada, the US, Chile and Scotland.

Tassal’s revenue surged 32.8 per cent to $788.7m, while net profit rose 31.9 per cent to $63.7m in the year to June 30.

The takeover comes as salmon prices have eased from a record high. The Nasdaq Salmon Index, which tracks the prices of the fish from Norway, the world’s leading producer, has fallen 5.13 per cent in the past quarter.

But in the past month, prices have crept up again, rising 10.1 per cent. In July, Rabobank said “recessionary dynamics resulting from a decline in disposable incomes” had sparked a shift toward retail from food service.

“For most supplier regions, and especially Norway, supply in (the first half of) 2022 was weak, resulting in a global contraction of 6 per cent, the highest negative supply growth since 2016,” Rabobank wrote in its latest update.

“Salmon supply will improve in 2H, compensating for the supply contraction in 1H. This year’s growth is still the lowest since 2016.”