Sea Harvest reels in subsidiary
Fishing company aims to fast-track growth by buying up all the shares in Australian Mareterram business
Sea Harvest, the fishing company controlled by empowerment group Brimstone, is determined to haul its entire Australian subsidiary on board to boost market share and growth. Sea Harvest confirmed a bid process on Tuesday to acquire all the shares it does not already own in 56.3%controlled Mareterram, which is listed on the Australian Securities Exchange.
Sea Harvest, the fishing company controlled by empowerment group Brimstone, is determined to haul its entire Australian subsidiary on board to boost market share and growth.
Sea Harvest confirmed a bid process on Tuesday to acquire all the shares it does not already own in 56.3%-controlled Mareterram, which is listed on the Australian Securities Exchange (ASX). The deal will cost Sea Harvest about AU$17m (or R163m) with the offer valuing Mareterram at about AU$39m.
Sea Harvest best known for its frozen hake cuts has been in an acquisitive mood of late, snapping up Viking Fishing as well as Ladismith Cheese Company in 2018.
Sea Harvest shares appeared to be buoyed by the news of the Mareterram offer, rising 3.85% to R13.50 in light volumes.
Group CEO Felix Ratheb explained that 100% ownership of Mareterram would fast-track growth including diversifying earnings and market share and presence in Australia. Mareterram operates 12 trawlers, catching and processing wild-caught king and tiger prawns, scallops and crabs. The company also operates a food marketing arm.
It appears that Sea Harvest has timed its tilt smartly with Mareterram’s share price touching a five-year low of AU$0.18 in November. The share finished January at AU$0.21, but has since spiked to AU$0.24, which is just below the AU$0.25 offer from Sea Harvest. Sea Harvest first acquired a 19.9% interest in Mareterram in early 2016.
A few months later, this stake was increased to 56.3%. Ratheb said full ownership of Mareterram would allow Sea Harvest to extract operational synergies and support the Australian company’s growth strategy.”
Ratheb noted that Sea Harvest has a long history with Mareterram, with the first agency agreement with the Craig Mostyn Group (Mareterram’s predecessor) signed more than 50 years ago.
In an announcement to shareholders, the Mareterram board excluding directors affiliated to Sea Harvest unanimously supported the buy-out offer. Shareholders representing 19% of Mareterram’s issued shares (excluding Sea Harvest and Sea Harvest affiliated directors) also intend to accept the offer.
Mareterram’s board pointed out that the offer represents a 31% premium over the 30-day volume, weighted average price of the company’s shares prior to the announcement of the deal.
In the year to end December, Mareterram reported revenues slightly down at AU$45m (previously AU$48m) with profits coming in slightly lower at AU$3m (AU$3.1m) on the back of a markedly lower prawn catch. The company also reported lower scallop catches and a below-expectation haul in its recently acquired mackerel fishing business.