Canada’s Cooke has signed a $1.1 billion deal to acquire Australian salmon farmer Tassal.
Unperturbed by things like six weeks diligence regimes, bickering over standstills, funding packages, investment committees or the like, the privately owned Cooke brought to a head years of talks with Tassal by making what they thought was their best offer, a $5.23 a share bid.
The unconditional offer, to be paid in cash, came after Cooke acquired a 10.5 per cent stake in Tassal in the past two months, and made approaches at $4.67 and $4.85 a share.
While Tassal rejected the $4.67 and $4.85 a share approaches, Cooke returned for its swansong, which it was confident would be high enough for Tassal’s big shareholders.
Sources involved said there was no need for a heavy diligence regime – Cooke knows the industry as well as anyone, ran diligence on fellow Tasmanian salmon group Huon Aquaculture last year and has had its eyes on Tassal for years.
It was also not reliant on a highly leveraged bid vehicle, a big bank syndicate or pesky LPs to make its purchase, and even had former Tassal owner David Williams of Melbourne firm Kidder Williams in its camp as financial adviser.
Cooke will pay $5.23 a share which was a 49 per cent premium to the undisturbed price, and higher than its earlier bids at $4.67 and $4.85 a share. Tassal last traded at $4.89 a share.
The deal valued Tassal’s equity at $1.1 billion and the company at $1.7 billion, including debt.
It was to be done via a scheme of arrangement.
Cooke already owns a 10.5 per cent stake in Tassal, acquired on-market in trades via a handful of brokers including Macquarie and Canaccord Genuity and under various entities.
Tassal’s the second Australian salmon business to be taken off the ASX-boards in the past two years. Last year it was Huon Aquaculture, the No.2 player to Tassal, which went to Brazilian meat giant JBS after an auction that also involved Cooke.
Goldman Sachs and Herbert Smith Freehills advised Tassal, while Kidder Williams and Allens are in Cooke’s corner.
Tassal announced the deal on Tuesday morning, to coincide with its 2022 financial year results.