TGR - Tassal Group

[galumay]

I nearly sold TGR last week! Glad i didnt after the price was up 12% on HY results released today.

 

[charlsie]

I'm glad you didn't. when the priced dropped below the recent issue price, I thought id pick up another 1000 shares this morning to round out the number I already have. I was too slow, ill wait and pick them up on weakness, but what a great day. and with the pork shortage in china, they may look to other sources for their protein, pushing up the price again?

 

[sptrawler]

China halting imports of European salmon, could be a bonus for Tassal, if the contamination proves correct.

https://www.smh.com.au/world/europe...-to-coronavirus-outbreak-20200615-p552w1.html

 

[Movendi]

https://www.bloomberg.com/news/arti...k-to-beijing-virus-outbreak?srnd=premium-asia
I noticed that but it looks like Australia would be affected to according to this article. Not sure why SP is positive in light of this?
"The $700 million market for imported salmon in China is at risk after the fish was implicated in a new outbreak of coronavirus cases in Beijing, potentially dealing a blow to major exporters like Denmark, Norway and Australia.

 

[galumay]

Given that the contamination appears to have a connection with European imports, I doubt it would affest Australian Salmon, but even if there is a short term blanket ban on Salmon imports regardless of origin, its hard to see it lasting long. Its likely there will be numerous cases like this where residual viral shedding is found on packaging etc, once the source is confirmed it will be back to normal. So I cant see any significant impact for anyone, positive or negative really.

 

[Chronos-Plutus]

im having a crack at the tipping comp and im hoping that in a month that this might move forward a little.

Not sure if the Beijing seafood market shutdown indirectly impacts Tassal operations.

 

[galumay]

Probably my least conviction holding, its managed to have a reasonable year all things considered. Cash flow shows up just how capital intensive this game is, FCF is about -$80m and I cant remember the last FCF +'ve year! I should probably just get out and find a better home for the capital!

 

[Clansman]

Probably my least conviction holding, its managed to have a reasonable year all things considered. Cash flow shows up just how capital intensive this game is, FCF is about -$80m and I cant remember the last FCF +'ve year! I should probably just get out and find a better home for the capital!

Still glad you didn't sell in February? You sure know how to find the rough amongst the diamonds.

 

[charlsie]

the position is even better after fridays close. i wonder if there's something in the air?

 

[UMike]

ONE of these stocks that never really recovered after the March 2020 COVID issues.

Was once a favorite of mine. Back on the radar. See If I can get the timings right?

 

[charlsie]

ONE of these stocks that never really recovered after the March 2020 COVID issues.

Was once a favorite of mine. Back on the radar. See If I can get the timings right?

I hope you do mike. I've been on these since i started making coolroom doors for their operations in Tassie. I've finally given up. hopefully the timing will work for you

 

[galumay]

There are a those with a view that TRG is a possible turn around story and can transition from a perpetual destroyer of shareholder value into a high quality business. I remain without conviction!

 

[The Triangle]

This will be an interesting Monday. Huon being purchased at $3.85 per share and around 1.5x net assets. TGR at 1.5 net assets (intangibles stripped out) would equate to somewhere around $5/share. Much higher than the current low 3's share price. Also, TGR is/should be in a slightly stronger position than Huon.

With TGR sitting near the top of the shorts list I expect to see a lot of pain for shorters this week. Might be an exit point for me if there is a jump in the SP. Will see.

 

[JohnDe]

• Promote dialogue and collaboration between and among small-scale artisanal fishers, fish farmers, fish workers, governments, and other key partners along the value chain, as well as to further strengthen their capacity to enhance sustainability in fisheries and aquaculture and to enhance their social development and well-being.

Maybe the tide of bad news towards all fish farms is turning

Events detail

www.fao.org

 

[The Triangle]

Dumped out of TGR this week. Results for the half looked good on first pass with EPS up to 17 cps, but after a little more detailed look I noted that net assets were up only due to re-rating the fish stocks, debt is up every so slightly, and the cash for the half came from dumping down a lot of inventory. With those taken into account the half doesn't really look any better than last year. And they've spent considerable capital over the past few years to boost earnings and I'm not convinced the earnings boost this half has been without a little creative accounting.

Still think this is a takeover target but I don't see any point holding on for a 8 cent dividend. Might get back in later on if the SP drifts back downward.

 

[JohnDe]

I was wondering why the SP had been climbing this past week.

David Williams lands Canadian aquaculture a prize catch in Tassal raid​

Canadian aquaculture giant Cooke has swallowed a 5.4 per cent slice of ASX-listed salmon producer Tassal, and is ready to gobble up more chunks of the Tasmanian-based company.
Cooke was revealed as the mystery buyer of a parcel of Tassal shares on Monday after a 10-day spending spree, buying at prices ranging from $3.42 to $3.85 a share and ending speculation that investment banker David Williams was returning for another bite at the company.

Mr Williams bought Tassal from receivership in 2003 before floating the company.

He has brokered some of the biggest Australian agribusiness deals, including turning around the fortunes of almond producer Select Harvests and returning Vegemite to Australian ownership after convincing Bega Cheese to buy the spread from confectionary titan Mondelez.

While Mr Williams was buying Tassal shares last week under Amore Foods – a private company he launched in 2004 – a substantial shareholder notice lodged on the ASX reveals he was purchasing on behalf of Cooke.

Cooke cast a line on Tassal in 2010 before walking home with an empty catch. It later tossed a lure at rival Huon, with Mr Williams advising them on the bid.

But it was unsuccessful, with Brazilian meat processor JBS acquiring Huon for $425m despite resistance from Andrew Forrest.

Cooke has turnover of some $2.7bn, salmon farms in Canada, US, Chile and Scotland, and has 10,000 employees. It is understood to be wanting to increase its geographic diversification further to help reduce the risks such as adverse weather and disease.

Tassal shares surged 3.1 per cent to $3.97 – a two-year high.

It is understood that Cooke is still active in the market, given Monday’s share jump.

 

[The Triangle]

I was wondering why the SP had been climbing this past week.

Darn. Shoulda held with my views a takeover was coming.

Insider trading this past few days obviously that ASIC will ignore.

 

[Dona Ferentes]

TGR has rejected a third buyout proposal from Canadian aquaculture company Cooke, and is refusing to engage in talks, arguing the latest $4.85 a share offer still undervalues the company.

Tassal’s board said the company has an “attractive independent future” where it will be better off going it alone. The latest Cooke bid values Tassal at $1.04 billion and is at a 22 per cent premium to Tassal’s close of $3.97 on Monday.

 

[JohnDe]

RECEIPT OF NON-BINDING, INDICATIVE, INCOMPLETE AND CONDITIONAL PROPOSAL Tassal Group Limited (ASX: TGR) (“Tassal” or the “Company”) refers to recent media commentary and the substantial holder notice lodged by Cooke Inc. and related parties after market on 27 June 2022, disclosing the acquisition of a 5.398% stake in the Company.

The Company has received a non-binding, indicative, incomplete and conditional proposal from Cooke Inc. (“Cooke”) to acquire 100% of Tassal’s ordinary shares by scheme of arrangement (Indicative Proposal) for cash consideration of $4.85 per Tassal share.

The proposal is subject to conditions including Cooke’s board approval, the Company’s board approval, arrangements for key management and entry into a Scheme Implementation Deed including exclusivity provisions.

Cooke has indicated that it has obtained Foreign Investment Review Board approval. This indicative proposal follows previous indicative non-binding confidential proposals received from Cooke for $4.67 and $4.80 per Tassal share. The Company’s Board evaluated those proposals and chose not to engage in relation to them

 

[JohnDe]

Darn. Sho...

Insider trading this past few days obviously that ASIC will ignore.

Maybe not -

"Cooke’s offer – its third tilt at the company and a 42.2 per cent premium on Tassal’s closing price from when it started buying shares in the company 10 days ago."

Tassal Group snubs Cooke’s $1.04bn takeover bid

Canadian aquaculture giant Cooke has lobbed a $1.04bn takeover of ASX-listed salmon producer Tassal after acquiring a 5.4 per cent stake in the company.

But Tassal’s board has rejected Cooke’s offer – its third tilt at the company and a 42.2 per cent premium on Tassal’s closing price from when it started buying shares in the company 10 days ago.

Cooke – which has turnover of some $2.7bn, salmon farms in Canada, US, Chile and Scotland, and has 10,000 employees – has proposed an all cash offer to acquire Tassal, priced at $4.85 a share.

Investors piled in, pushing Tassal shares up 15 per cent to $4.56 at the start of trading on the ASX on Tuesday morning.

The latest $4.85 a share offer comes after Tassal’s board rejected two earlier confidential bids from Cooke priced at $4.67 and $4.80 a share respectively. In a statement to the ASX on Tuesday, Tassal said Cooke’s latest offer still isn’t high enough.

“The company’s board of directors has evaluated the Indicative Proposal with the assistance of its financial advisor and has determined that the Indicative Proposal does not reflect the fundamental value of the business and is not in the best interests of shareholders,” Tassal said.

“Accordingly, the company’s board has determined not to engage with Cooke regarding the indicative proposal. Shareholders are advised that they do not need to take any action.

“Tassal has an attractive independent future and is well positioned to deliver growth in shareholder value. The board of directors and management team remain focused on building on the company’s long history and delivering on our strategic objectives.”

Tassal shares have largely traded sideways in the past two years, having shed 23.5 per cent from their peak of $5.19 in August 2019.

Surging global demand for protein has sparked a gold rush, particularly in aquaculture given their efficient food conversion – or how much feed is needed to produce a kilogram of meat. Salmon has ration of close to 1:1.

Cooke’s interest comes after it first had a nibble of Tassal in 2010 and Brazilian meat processing behemoth JBS taking over rival Huon for $425m last year despite resistance from Andrew Forrest.

JBS Australia managing director Brent Eastwood said at The Australian’s Global Food Forum this month that salmon farming was a “misunderstood business” and was an efficient way to help meet surging demand for protein.

“At the end of the day the planet we live on, the surface is 70 per cent water. But the protein we consume today is only 7 per cent fish,” Mr Eastwood said. “In many parts of the world there is overfishing of the available natural wild species of fish. But (salmon farming) is a very sustainable business. It’s very energy efficient and doesn’t use much land.”

Tassal chief executive Mark Ryan said at the company’s latest financial results in February that it was now “experiencing the benefits of scale” after completing its investment in salmon biomass growth.

“Together with the investments in and growth of our prawn business, where we achieve more attractive capital and working capital cycles, Tassal is focused on growing cashflow and optimising returns. We have delivered a stepchange in cash generation and believe Tassal is well positioned to deliver further improvements in cash flow and cash conversion going forward,” Mr Ryan said.

“We are now at scale delivering a sustainable annual salmon harvest of around 40,000 hog tonnes, and optimising sales mix through branded product development in retail leveraging Tassal’s No. 1 salmon and protein brand position, strategically balancing contract unbranded sales, and capitalising on the strong recovery in global pricing and the commencement of pricing recovery in the domestic market.”

Cooke is being advised by investment banker David Williams, who bought Tassal from receivership in 2003 before floating it on the ASX.

Mr Williams has brokered some of the biggest Australian agribusiness deals, including turning around the fortunes of almond producer Select Harvests and returning Vegemite to Australian ownership after convincing Bega Cheese to buy the spread from confectionary titan Mondelez.

He has been buying Tassal shares in the past two weeks under Amore Foods – a private company he launched in 2004 – on behalf of Cooke at prices ranging from $3.42 to $3.85 a share.

Its shares surged 3.1 per cent to $3.97 – a two-year high – after Cooke’s stake in the company was revealed on Monday.

Tassal is being advised by Goldman Sachs as its financial advisor and Herbert Smith Freehills as its legal advisor.

JARED LYNCH REPORTER