Marine Harvest ASA, the world’s biggest salmon farmer, raised its takeover bid for Norwegian fish-food maker Cermaq ASA and said it abandoned an even larger offer after talks between the companies failed.
Marine Harvest offered 8.6 shares and 53.25 kroner in cash for each Cermaq share, or 107 kroner apiece based on yesterday’s closing price, according to a statement today. The offer, which values Cermaq at 9.9 billion kroner ($1.7 billion) is conditional on getting acceptances from at least 50 percent of shareholders, the company said. It already owns 5.4 percent.
The company, controlled by billionaire John Fredriksen, said it scrapped a plan to boost its original offer by more than 8 kroner a share and raise the portion settled in shares after it failed to receive support for such an offer from Cermaq’s board. The Norwegian government owns 43.5 percent of Cermaq.
Marine Harvest, which is seeking to expand its fish feed operations, originally offered 105 kroner a share, including a 1 krone dividend. Cermaq makes feed and also operates salmon farms in Chile, Canada and Norway. The bid was conditional on Cermaq canceling a 3.5 billion-krone takeover of Copeinca ASA. That takeover was rejected at a shareholders meeting last week.
The failure of the boards to reach a recommended solution is a lost opportunity to create an industry-leading company, Olaug Svarva, managing director of Folketrygdfondet, which holds a 5.4 percent stake in Cermaq, said in a statement.
“As it looks now, this opportunity to create vale through a merger has been lost,” said Svarva.
Cermaq fell as much as 3.1 percent to 108 kroner after the offer, and traded at 109.5 kroner as of 2:31 p.m. in Oslo. Marine Harvest shares were down 1.4 percent at 6.16 kroner.
“In regard to the board’s evaluation of the voluntary offer now to be launched by Marine Harvest, the board is maintaining its conclusion that such offer significantly undervalues Cermaq,” Cermaq said in a separate statement.
Marine Harvest said that it would sell its shares in Cermaq should it not get sufficient acceptance for today’s offer.
“Together with capital raised prior to the offer, these funds may be made available to finance the company’s expansion in feed; to enhance capacity in farming including potential acquisitions of financially distressed companies in Chile; and to increase the company’s short- and long term dividend capacity,” the company said. “The board of Marine Harvest sees this as an attractive alternative to pursuing the Cermaq transaction if it does not receive sufficient support for its offer for Cermaq.”