June 03, 2013
Salmon farmer Cermaq rebuffed a raised $1.7-billion bid from rival Marine Harvest on Friday in a take-over battle which pits Norway’s government against Harvest’s biggest shareholder, the maverick shipping tycoon John Fredriksen.
Marine Harvest, the world’s biggest fish farmer, first offered to buy Cermaq for a mix of cash and shares and then dangled the prospect of an even higher offer on Friday, but only if the board, and the government as Cermaq’s biggest shareholder with a 43.5 percent stake, would support the deal.
But Oslo-born Fredriksen, estimated to be worth $11.5 billion by Forbes magazine, has long antagonised the authorities in his home country.
Having given up his Norwegian citizenship years ago to escape high taxes, he last year announced plans to move the management of his drilling giant Seadrill out of Norway, raising tensions with the centre-left government.
Marine Harvest increased its bid to 107 crowns a share on Friday from 104 crowns but said it might have increased the offer by another five crowns had Cermaq’s board agreed.
The cash-and-shares deal would give the government about 7.6 percent of the enlarged Marine Harvest group, according to Thomson Reuters data, while Fredriksen’s investment vehicle, which tends to dominate his firms, would hold 23.5 percent.
“Negotiations were all about the price,” Marine Harvest Chairman Ole-Eirik Leroey said. But Cermaq said in a statement that talks with Marine Harvest had been terminated as it did not feel the proposed terms of the offer would get “broad support” from its shareholders, noting the “substantial equity element” of the revised offer, which is 53.25 crowns in cash plus 8.6 shares in Marine Harvest for every Cermaq share.
The issue of broad support for the offer was important as it would better ensure an efficient integration between the two businesses, it said, and “given that the consideration discussed between the parties consists of a substantial equity element, the nature of the integration has a direct bearing on the value of the consideration.”
Shares in Cermaq shares were down 1.4 percent at 110 crowns on Friday, holding above the latest offer as investors bet on a further improvement in the offer.
Shares in fish farmers have been strong this year as global demand for fish is rising fast while supplies are limited and the threat of renewed disease in Chile, a key producer, is keeping prices high. Source Reuters.
Published: Zarai Media Team