JBS wins FIRB approval to take over Huon Salmon

The Foreign Investment Review Board has no objections to Brazilian meatpacker JBS’s takeover bid for Huon Salmon.

Huon Salmon has hailed FIRB’s decision as an ‘important step in securing the future’ of the company.

After a battle with mining magnate Andrew Forrest, Brazilian meatpacker JBS has had better luck with the Morrison government in its bid to take over Huon Salmon, winning foreign investment approval.

The Foreign Investment ­Review Board announced on Monday that it had “no objection” to JBS’s $3.85-a-share cash takeover of Huon.

This is despite Dr Forrest, who has a doctorate in marine ­science, amassing a significant holding in the company and criticising JBS’s animal welfare ­record.

Huon chairman Neil Kearney, formerly of Goodman Fielder and Warrnambool Cheese & Butter, hailed FIRB’s decision as an “important step in securing the future of Huon, our 800-plus employees and hundreds of Tasmanian businesses that work with our company”.

“In addition to its commitment to invest in the business and our people, JBS has committed to maintaining our world-leading farming practices to support long-term sustainable growth,” Mr Kearney said, while praising JBS’s animal welfare practices – contradicting Dr Forrest.

“Huon has established the highest standards of animal husbandry, biosecurity, environmental management and sustainable farming practices and JBS will continue this uncompromising approach. Importantly, JBS also has the proven skills and expertise to access new international markets for Huon’s premium products.”

Huon chairman Neil Kearney.

Mr Kearney had previously dismissed Dr Forrest’s crusade against JBS as “noise”, declaring he would not be distracted by it. This is despite Dr Forrest’s Tattarang accumulating an 18.5 per cent holding in the company.

Dr Forrest had called on JBS to improve its animal husbandry processes, accusing it of not operating on a “no pain, no fear” basis in its meat processing businesses around the world.

“Dr Forrest has questioned aspects of the animal husbandry practices of JBS and environmental standards of Huon and the salmon industry in Tasmania,” Mr Kearney said in a statement to the ASX in August.

“It is important to note that the JBS proposal is the culmination of a rigorous strategic review process that was designed to identify the most compelling value proposition for all Huon shareholders. Tattarang was invited to participate further in the strategic review process, on the same customary terms as other process participants, and submit a final and binding offer but declined to do so.

“We are focused on providing our shareholders, particularly retail shareholders, with the opportunity to secure proper value for all their Huon shares. We will not be distracted by external noise that does not provide Huon shareholders with that opportunity.”

Andrew Forrest. Picture: Tony McDonough

Mr Kearney said the Huon board would confirm “as soon as possible” whether it would pay a special dividend of 12.5c per Huon share, which would enable Huon shareholders to realise additional benefits from franking credits of up to 5c per Huon share.

If paid, the special dividend would be subtracted from JBS’s bid of $3.85 a share. JBS intends to acquire Huon via concurrent schemes of arrangement and an off-market takeover bid being run in parallel “but not in substitution to the schemes”.

“No competing proposals have been received since the (JBS) schemes were announced on August 6. The independent board committee continues to recommend that Huon shareholders vote in favour of the primary scheme, surveyors acquisition and accept the takeover offers and the Huon board continues to recommend that Huon shareholders vote in favour of the secondary scheme,” Mr Kearney said.

JBS Australia chief executive Brent Eastwood said: “We have grown all of the businesses we have acquired in Australia and JBS is committed to doing the same with Huon. JBS Australia is excited about the prospect of acquiring Huon, which represents our first step into the aquaculture industry for JBS globally. JBS is committed to Huon, its employees, the local Tasmanian community and the broader principles of environmental sustainability, animal welfare, safety and social responsibility.”

Mr Eastwood paid tribute to Huon’s founders, the Bender family. “Peter and Frances Bender along with their team have built an amazing business and our aim is to build off this strong foundation,” he said.

“JBS has the commercial relationships and the ability to open up and access new markets which, combined with the Huon team’s knowledge and expertise, create a fantastic opportunity to take this business forward.”

A shareholder meeting will be held on Friday, with November 9 slated as a potential special dividend payment date, with the takeover becoming effective from November 17, subject to the shareholder vote.