The chairman of Tasmanian salmon farmer Huon Aquaculture has revealed that Fortescue founder Andrew Forrest lobbed an early bid to acquire the company that was knocked back for being too low.
In a letter to shareholders posted on Monday morning, Huon chair Neil Kearney said Mr Forrest’s investment vehicle Tattarang made a non-binding and unconditional offer for the business earlier in the year after Huon began a review of its business operations.
Andrew Forrest’s Tattarang could decide the fate of the takeover of Huon. Credit:Lee Griffith
Tattarang was given the opportunity to participate further in the review process and submit a final offer for the business but declined to do so. However, Mr Kearney said the firm’s offer was much lower than the $3.85 a share deal currently being offered for the business from Brazilian meat processor JBS.
“We are focused on providing our shareholders, particularly retail shareholders, with the opportunity to secure proper value for all their Huon shares,” Mr Kearney said.
“We will not be distracted by external noise that does not provide Huon shareholders with that opportunity.”
The revelation that Tattarang and Mr Forrest had made an early bid for Huon helps explain the billionaire’s actions in recent weeks and puts further pressure on him to make his own offer, with a source close to the transaction saying it was time for Mr Forrest to “put up or shut up”.
Tattarang first acquired a 7 per cent stake in Huon in June, a move Mr Forrest had said was to investigate how to best improve the company’s environmental credentials. But after JBS lobbed its takeover offer in early August, Tattarang more than doubled its stake to 18.5 per cent.
Mr Forrest has since made a number of public calls for JBS to improve its animal welfare practices and indicated he could use his shareholding to block the initial takeover bid, which requires 75 per cent of shareholder approval. However, JBS then launched a second, parallel off-market takeover offer, which requires just 50 per cent of shareholder approval.
On Friday, Mr Forrest called on the foreign investment review board to closer analyse the deal and indicated he could still be open to making his own takeover bid.
In his letter, Mr Kearney further reinforced Huon’s commitment to animal welfare and environmental practices, and noted any new owner would be required to match those commitments.
The chair said the company would consider any new proposals from third parties on its merit from a shareholder value perspective. Huon will send investors further details on the JBS scheme, including an independent expert’s report, in approximately four weeks.
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