As Norwegian fish farming company Cermaq approaches decision time on whether to accept a buyout offer from rival Marine Harvest or stick with its plans to buy Peruvian fishmeal company Copeinca, Marine Harvest has sent an open letter to shareholders urging them to accept its offer.
The open letter, signed by Marine Harvest Chairman Ole-Eirik Lerøy, comes in the wake of a statement by the Cermaq board rejecting Marine Harvest’s bid.
While the letter does not address Cermaq’s statement directly, it suggests that the Cermaq board is rejecting the Marine Harvest offer out of a legal obligation to stick to its original bid for Copeinca, not because the board doesn’t like the Marine Harvest offer.
“Because the Cermaq Board of Directors is obliged to support the Copeinca transaction, it has stated that it is not able to support our offer or enable our offer to be presented without conditions,” Lerøy wrote. “If the proposed equity issues required to finance the Copeinca transaction are voted down we expect that most conditions can be removed rapidly.”
The Marine Harvest bid is the latest in a string of developments beginning with China Fishery Group offering to buy Copeinca back in February. Cermaq then made a higher bid, which China Fishery Group has matched.
But the Marine Harvest bid is contingent upon Cermaq abandoning its bid for Copeinca, leaving Cermaq to decide which it wants more.
“In our view, no other industrial combination is better suited than Cermaq and Marine Harvest to raise both these companies and the Norwegian marine industry into a position of global leadership,” Lerøy wrote. “We believe a company such as this should not be built through increased exposure towards fisheries and the raw materials markets, where fish meal is gradually being phased out as the base of marine feed.”
Cermaq will hold its annual general meeting on 21 May, where the company is expected to vote on whether to continue with the Copeinca bid. The Marine Harvest letter actually offered to send representatives to the meeting on behalf of shareholders who could not make it, but wished to vote in favor of accepting Marine Harvest’s offer.
