Clearwater Seafoods formally rebuffs Cooke Aquaculture takeover bid as too low

Published on September 27, 2011

HALIFAX — The board of Clearwater Seafoods Income Fund board has formally rejected a takeover bid from rival Cooke Aquaculture takeover bid as too low.

The Halifax company said Tuesday it believes the $3.50 per unit offer — valuing Clearwater at about $97.1 million —  “does not adequately reflect the value of the fund and its future prospects.” Cooke already owns Cooke holds 10.9 per cent of the voting stock in the fund.

John Risley, president of Clearwater Fine Foods Inc., which holds 48.2 per cent of the fund’s voting units, stated last month that he believed the deal would not succeed.

Privately-owned Cooke, led by CEO Glenn Cooke, primarily farms salmon. The company announced its hostile bid Aug 12. and Halifax-based Clearwater announced a unitholder rights plan three days later to fend off the takeover bid from the New Brunswick company.

The poison pill plan allows unitholders to acquire units at an 80 per cent discount if Risley’s company increases its stake or if someone else acquires ownership of at least 20 per cent of the fund’s voting units.

Cooke has said it welcomes the plan because it prevents insiders from buying more shares to block a potential bid.

Risley has said Cooke’s offer is too low, as Clearwater is in the midst of a recovery. It is also in the process of transforming itself from an income fund to a publicly traded corporation.

Clearwater has 1,600 employees, about 20 vessels, seven plants and offices in Toronto, Europe, China, Japan, Europe and the United States. The company is best know for its lobster products, but it also harvests scallops, clams, shrimp, crab and other ocean fish.

Cooke has about 2,500 employees at salmon operations in New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Maine, Chile and Spain, as well as sales people in the United States and Canada.

Cooke Aquaculture processes and sells more than 115 million pounds of Atlantic salmon and 35 million pounds of trout each year, generating more than $500 million in sales.