Marine Harvest May Boost $1.7 Billion Cermaq Bid, Analyst Says

Marine Harvest ASA (MHG), the world’s biggest salmon farmer, may increase its 105 kroner-a-share ($18.13) bid for Cermaq ASA (CEQ), the largest publicly traded fish- feed maker, by as much as 10 kroner, SpareBank 1 Markets said.

“The price offered is not high enough to make us certain” of acceptance from the Norwegian government, Cermaq’s largest shareholder with a 43.5 percent stake, SpareBank 1 analyst Geir Kristiansen said in a note to clients today. “The bid is lower than fair value for Cermaq as-is.”

The bid by Marine Harvest, based in Oslo, needs the acceptances of two-thirds of Cermaq’s shareholders, according to an April 30 statement. It also needs Cermaq to abandon its plan to buy Peruvian fishmeal- and oil-maker Copeinca ASA (COP) in a 3.5 billion kroner deal.

Marine Harvest’s offer is “inadequate” and Cermaq will proceed with its purchase of Copeinca, Cermaq said yesterday.

Cermaq’s takeover of Copeinca would boost the company’s fair value to 121 kroner per share from 112 kroner now, while synergies between Cermaq and Marine Harvest could amount to 23 kroner per Cermaq share, Kristiansen wrote. Cermaq’s current share price also “ gives room” for a higher offer, he said.

Cermaq shares rose as much as 3.9 percent to 108 kroner earlier today after Marine Harvest Chairman Ole-Eirik Leroey said “reason will prevail” in his company’s efforts to buy the fish-feed maker. The stock traded 3.4 percent higher at 107.5 kroner as of 3:50 p.m. in Oslo, still above Marine Harvest’s 105 kroner offer price, which includes a planned 1 krone per share dividend.

Sparebank 1 Markets has buy recommendations on both Marine Harvest and Cermaq.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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