"Do not accept" – Norway Royal Salmon board unanimously recommends shareholders reject NTS offer

Following a review of the mandatory offer made by Norwegian aquaculture group NTS ASA to buy all outstanding shares in Norway Royal Salmon ASA (NRS), the board of directors at NRS has recommended its shareholders reject the offer, which is due to expire on 16 August.

NTS made the mandatory offer to buy all shares in NRS on 16 July for NOK 209 (USD 23.42, EUR 19.99) per share, with the offer valid from 19 July to 16 August, 2021. But NRS’s board has said that in its view, the offer price does not reflect the underlying values in the fish-farming company, which hold permits to farm up to 36,085 metric tons (MT) of salmon in in Troms and Finnmark, Norway, and additional permits to farm 17,800 MT of salmon and 5,300 MT of trout in Iceland through its subsidiary Arctic Fish. It also holds a minority interest in two associated Norwegian fish farming companies, which together own nine fish farming licenses.

The board previously offered a similar advisement on 21 July, but said it would follow it up with a formal statement on the offer at least one week before its expiration.

“The board’s conclusion is supported by its view of Norway Royal Salmon's capability to generate competitive returns in the future, also taking into account the production of triploid salmon being phased out and the growth projects related to the company’s new smolt facility, the Arctic Offshore Farming concept, and the successful operations on Iceland through Arctic Fish,” it said. “The recommendation is unanimous.”

However, the board has also advised that should it become probable that NTS will be able to acquire a controlling ownership in NRS, then shareholders not having accepted the offer should be alert to the possibility of this having adverse effects on liquidity and share pricing by removing the strategic value of the company for other potential interested parties. 

“In light of the process initiated by the board to explore strategic options for Norway Royal Salmon, the board recommends that shareholders, in any event, refrain from accepting the offer until the very end of the acceptance period (16 August, 2021).”

According to the statement, members of the board who participated in the issuance of the statement and NRS CEO Charles Høstlund do not intend to sell their shares under the offer. 

On 10 August, NTS received acceptance under the offer for 1,176 shares. During the offer period, it has received acceptances for a total 4,801 shares in NRS. In addition, it has acquired 601,871 shares in NRS through the marketplace.

Including the 13,440,729 shares already held directly and indirectly by NTS as well as an additional 1,624,607 shares that NTS has agreed to acquire from Gåsø Næringsutvikling AS, NTS owns 15,672,008 shares in NRS, equivalent to nearly 36 percent of the company.

Established in 1992, NRS has grown into one of the largest aquaculture firms in Norway, aiming to harvest a total of 52,000 MT of salmon this year, of which 40,000 MT will be produced in Norway. 

Photo courtesy of NRS