Unexpected secondary takeover bid.
According to a report in the Sydney Morning Herald, Brazilian meat processing giant JBS has launched a surprise secondary takeover bid for Tasmanian fish farmer Huon Aquaculture. The move is part of an effort to by-pass mining billionaire Andrew Forrest whose investment company, Tattarang has doubled its stake in Huon in the week since JBS launched its first takeover bid.
On Friday evening, JBS announced it had decided to pursue an off-market takeover bid for Huon at $3.85 per share and with a minimum acceptance condition of 50.1 per cent.
This bid will run in parallel to JBS’ existing acquisition offer for Huon, which the company is running through a scheme of arrangement, also at $3.85 per share.
Under Australian takeover law, parties interested in acquiring companies can pursue off-market takeover bids. In this situation, the bidder makes individual offers directly to all target securityholders to acquire their securities. The offers must all be on the same terms, including the offer price. The offers are contained in a document that is mailed to target securityholders called a ‘bidder’s statement’.
Huon has encouraged shareholders to vote in favour of the initial scheme of arrangement, but said on Friday the takeover offer was a good alternative.
Challenge to JBS
The secondary bid comes in light of Andrew Forrest’s challenge to JBS to improve its animal welfare and sustainability credentials, with the billionaire suggesting Tattarang could block the scheme if such commitments weren’t made.
By running a parallel takeover bid, JBS is hoping to gain a large enough stake to give it control over Huon and negate any potential action from Tattarang and Mr Forrest. The company has already acquired a 19.9 per cent stake after an agreement with the Benders.
In a statement, JBS said events in the last week may have “given rise to some uncertainty” for shareholders around the success of the acquisition and made the additional bid in order to provide certainty for investors.
Sustainability and animal welfare
“JBS shares Tattarang’s view that good business must also be good for the environment. JBS has written to Tattarang directly, outlining its uncompromising global commitment to sustainability and animal welfare,” JBS Australia chief executive Brent Eastwood said.
“This commitment extends to Huon, where JBS intends to build on the legacy of the Bender family, upholding the highest standards for superior quality, fish health and sustainable farming practices – from water management to animal welfare, net zero emissions and stock densities.”