How Canada’s Cooke plans to reel in Tassal with $1.04bn takeover bid

Fishing is a patient game and Glenn Cooke, CEO of Cooke Inc, doesn’t mind taking his time to reel Tassal in, despite being knocked back for the third time by the company.

Glen Cooke said his Canadian business would play the long game in its bid to acquire Tassal.

Fishing is a patient game where you have to be prepared to walk away empty – Canadian seafood giant Cooke knows this too well.

On Tuesday Tassal revealed Cooke had lobbed three takeover offers for the company, the most recent bid priced at $4.85 a share –- and has faced three rejections.

It comes a year after Cook had a tilt at Tassal’s smaller rival Huon but was ultimately unsuccessful with Brazilian meat processing major JBS taking over the company for $425m last year.

But Cooke’s interest in Australia goes back further than that. It initially made another bid for Tassal in January 2011.

Cooke chief executive Glenn Cooke told The Australian he does not want to rush a deal.

“We’ve got respect for the board, we’ve got respect for the management. This could take a long time and we’re prepared for that,” Mr Cooke said.

“We’re a family company and have different dynamics to public companies. If it takes a long-term play, we’re happy with that. And again, we want to do it in a respectful way for management.”

Success in aquaculture takes time, and money. It’s expensive and selectively breeding stock to deliver scale and efficiency can take decades.

The Cooke family established their company in 1985. It has grown to generate turnover of some $2.7bn, with salmon farms in Canada, US, Chile and Scotland, and 10,000 employees.

But Tassal’s board has declined to engage with Cooke, believing its latest offer undervalues the company. If the deal fails to progress, there is plenty of other work around the globe to keep Cooke busy – but it will still have an eye on Tassal, the shares of which have traded largely sideways for the past two years.

“We’ve got operations in Spain where we grow sea bass and sea bream, so different species. In Central America we farm shrimp – a different species than what’s grown by Tassal,” Mr Cooke said.

“Obviously we have grown our wild fisheries — we’re very present in the Argentina industry. So we continue to grow across the globe, looking for opportunities. We’ve got a lot of places where we can grow and invest. We will work to do things in a proper way.”

Cooke has so far acquired a 5.4 per cent stake in Tassal, buying at prices ranging from $3.42 to $3.85 a share in the past 10 days. It’s takeover offer represents a 42.2 per cent premium from when it began its spending spree.

Tassal shares soared 16.1 per cent following the takeover bid to $4.61. Cooke has given Tassal shareholders an opportunity just before June 30 to crystallise their gains.

“We like the people, we like the management,” Mr Cooke said. “As a footprint around the world, we’ve been growing, so we see this is a fit with our other global operations. It (Tassal) has limited growth capacity, it’s very mature in the salmon sector but we certainly think there are some concepts of working together with our other operations to make things work, we believe.

“Basically, it’s another stable geographic diversification for us in a country that has a lot of similarities to Canada.”

But with salmon prices rising and Tassal completing a significant capex program to deliver scale, some investors believe the company’s shares will continue to rise – even in the absence of a takeover. “The thing with the business is quite a bit has changed in the past 12 months,” Investors Mutual portfolio manager Simon Conn said. “There’s no more salmon farm leases being granted in Tasmanian waters,” he added.