Whoa … I didn’t see that one coming. I turned on my computer this morning and saw a headline for Tasmanian salmon farmer Tassal Group: ‘WBA: Sale of TGR Shares’.
WBA is the ASX code for Webster Limited, an agricultural company that owned 19.8% of Tassal and has been very public about its wishes to dispose of the stake.
Following yesterday’s announcement that private equity group PEP was interested in buying Tassal, I was expecting the Webster announcement to be a sale to PEP, or another private equity group.
So it came as something of a shock to read that Webster has sold its stake to ‘Pacific Andes Resources Development Limited’. Who?
Upon investigation, it’s not as strange as it seems at first glance. The acquirer is part of Pacific Andes International, one of the world’s largest seafood businesses. But it’s a blow for any shareholders hoping for a bidding war, and it’s going to make them even less happy with the board.
The Financial Review this morning reported that the sale might actually ignite a bidding war. Who is going to bid against a 20% shareholder that, presumably, has no interest in a quick 20% or 30% gain? While Webster was there as a very keen seller, private equity had the perfect springboard for an unsolicited bid.
Hong-Kong based Pacific Andes, though, looks like the perfect white knight for a board that has already indicated they have no interest in recommending a bid at anything like the current price. With its Asian distribution networks, Pacific Andes might be a good long-term partner for Tassal. But I reckon PEP and any other financial buyers will be closing their fancy valuation models for good.
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Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.