Sea Harvest Holdings, a subsidiary of the JSE-listed Brimstone Investment Corporation, has entered into a bid implementation agreement with Perth-based agribusiness Mareterram, which could increase Sea Harvest’s already majority share in Mareterram to about 59.6%.
Sea Harvest’s offer, announced Friday, involved a proportional cash offer of a maximum of A$19.7-million (or R225.4-million) to acquire half the shares held by other Mareterram shareholders at a cash price of A$0.35 (or R4) a share at the current exchange rate.
Through a wholly owned subsidiary, Sea Harvest became the largest of Mareterram’s shareholders in January, when it acquired 19.9% of Mareterram, a vertically integrated agribusiness recently listed on the ASX. Should all Mareterram shareholders accept Sea Harvest’s offer, its share in the company would increase to about 59.6%
One of the conditions, among many, of Sea Harvest’s offer was that it had to achieve a 50.1% shareholding in Mareterram.
All Mareterram directors indicated that they intended to accept the offer and unanimously recommended that the company’s other shareholders do the same. Comprising a 29.7% shareholding, Mareterram’s four largest shareholders after Sea Harvest indicated that they would accept the proposal in the absence of a better alternative.
Still, Mareterram had appointed an independent expert to determine if Sea Harvest’s offer was fair and reasonable to its shareholders.
Should all shareholders accept the offer, Sea Harvest would be able to diversify its primarily hake-focused business to include sustainably wild-caught products, including prawns, scallops and crabs.
Further, the acquisition would provide Sea Harvest with geographical diversification, also enabling it to strengthen its hard currency earnings potential.
Meanwhile, Sea Harvest’s parent company, Brimstone, was looking to increase its shares in Sea Harvest by acquiring Kagiso Strategic Investment’s 27% stake in Sea Harvest. This would effectively increase Brimstone’s shares in the fishing company from 58.44% to 85%.