SalMar puts its trust in the issue authorization in the battle for Norway Royal Salmon (NRS).
In the ongoing bidding process for the acquisition of the Trondheim fish farmer, NRS’s board stated that “the evaluation of strategic opportunities will continue” – even after NTS raised its bid from 209 to 240 kroner.
On Friday morning, a concrete answer emerged as to what such a strategic opportunity could be: The big fish, SalMar offered NOK 270 per share. It remains to be seen whether NTS respond to their competitor’s push.
“It is difficult to say how much NTS is finally willing to bid for NRS. Strategically, the company fits better with SalMar in terms of locations and SalMar is a significantly larger player than NTS,” said salmon analyst Christian Nordby in Kepler Cheuvreux to SalmonBusiness.
“So in the end I will not be surprised if NRS now becomes a SalMar company. I am more surprised that the offer from SalMar is coming now and not a few months ago,” he added.
Synergies
The challenge for SalMar is, of course, that NTS has managed just over 37 per cent of NRS ‘outstanding shares.
“NRS and SALM have operations in the same areas both in Norway and in Iceland, and there should be significant synergies in a combined company. The offer of NOK 270/share values NRS at 12x/11x 22e/23e EBIT, which still is at a small discount to SALM, before potential synergies, of 13x/11.5x. SALM requires a minimum acceptance of 50 per cent. SALM has also requested the board of NRS issue 4.36m (10%) new shares in NRS to SALM, which the board is prepared to do,” wrote Pareto analyst Carl-Emil Kjølås Johannessen in a note to his customers.
This issue authorisation is central to SalMar.
“This benefits all interested parties. NRS has a share issue authorization, which can be used to ensure that you get over 50 per cent ownership, for example, and ensure the best for the shareholders in NRS,” said IR contact Håkon Husby in SalMar to TDN Direkt.
“The board has confirmed that they are willing to use the board authorization, if necessary, for the best offer,” he said.
Cultural values
SalMar’s CFO Trine Sæther Romuld is open to why SalMar is now getting involved in the battle for competitor NRS.
“We have always been very interested in what NRS has built up as a company and delivered. In relation to a concrete process of actually making a bid, it was initiated by the fact that there was actually another concrete bid for the company,” said Sæther Romuld to E24 .
“It is a company that, in our experience, has many of the same cultural values as Salmar,” she added.
SalmonBusiness has contacted Helge Gåsø, main shareholder in NTS, for a comment on the new development in the battle for NRS. he has not yet had time to answer SalmonBusiness.
