SalMar jumps into bidding for Norway Royal Salmon

Frøya Municipality, Norway-headquartered salmon farmer SalMar ASA has announced its intention to launch a voluntary cash offer to acquire all outstanding shares in Norway Royal Salmon (NRS).

The offer of NOK 270 (USD 29.69, EUR 25.42) per share eclipses the latest offer on the table from aquaculture group NTS ASA of NOK 240 (USD 26.39, EUR 22.60) per share.

In a statement, SalMar said that its offer values the company at approximately NOK 11.8 billion (USD 1.3 billion, EUR 1.1 billion), representing a 12.5 percent premium on the NTS offer and a premium of 54 percent to the 30-trading day (volume-weighted average price of NRS shares prior to the date of NTS’s offer.

SalMar said the two companies have “several overlapping industrial interests,” in northern Norway, the west fjords of Iceland, and offshore, and that combining these assets “offers ample opportunities to realize significant synergies.”

Among these synergies, SalMar identified that NRS’s new smolt facility in Dåfjord, outside Tromsø, together with its own smolt capacity and the Senja 2 and Tjuin facilities that are under construction, will be valuable resources that can guarantee the delivery of the right smolt at the right time. And it said SalMar’s new processing plant on Senja, InnovaNor, will be able to secure large additional volumes, allowing for improved economies of scale. Further synergies could come from the possible combination of Icelandic Salmon, which is controlled by SalMar, and NRS-owned Arctic Fish, it said.

Following regulatory approval by the Oslo Stock Exchange, which SalMar said it expects in the first half of September, SalMar’s offer document will be distributed to NRS shareholders. The offer period will last four weeks, subject to extensions. 

Earlier this month, NTS raised its initial offer to buy NRS shareholdings from NOK 209 (USD 22.98, EUR 19.68) per share to NOK 240, and extended the offer period by 10 days to 26 August, 2021. The increase came after the board of directors at NRS unanimously recommended shareholders reject the offer, saying that the price did not reflect the underlying values in the fish farming company.

Up to 11 August, NTS directly and indirectly owned a total of 16,072,182 shares in NRS, corresponding to approximately 36.89 percent of the voting shares off the company.

NRS currently has 36,085 metric tons (MT) of maximum allowed biomass (MAB) for salmon farming in Troms and Finnmark in Norway, and 17,800 MT MAB for salmon farming and 5,300 MT MAB for trout farming in Iceland through Arctic Fish. It also holds a minority interest in two associated Norwegian fish-farming companies, which together own nine fish-farming licenses.

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