With reduced offer rejected, Cooke backs off Nueva Pescanova acquisition

After digging into the financials of its acquisition target Nueva Pescanova, Blacks Harbour, New Brunswick, Canada-based Cooke Inc. lowered its offer to owner Abanca, resulting in the breaking off of negotiations.

In June, Cooke lowered its offer for Nueva Pescanova, originally in the range of EUR 150 million (USD 165 million) plus the assumption of EUR 500 million (USD 552 million) in liabilities in exchange for an 80 percent ownership stake. The revised offer, EUR 50 million (USD 54.7 million) plus a capital injection of EUR 200 million (USD 218.8 million), was rejected by Abanca and the offer has been withdrawn, according to Faro de Vigo.

During the due diligence process, Cooke had reportedly explored the possibility of selling off Nueva Pescanova’s fishing subsidiaries in Namibia (Novanam) and Mozambique (Beiramar). Cooke CEO Glenn Cooke had planned a trip to Nueva Pescanova’s headquarters in Galicia, Spain, in June to close the deal, but talks between the two parties have since been suspended and Cooke has no plan to return to Spain, according to the newspaper.

An internal audit of Nueva Pescanova’s finances unturned an infrastructure investment deficit estimated at EUR 285 million (USD ), and an external audit returned inconsistencies in the company’s finances. Having recently emerged from bankruptcy, Nueva Pescanova remains highly leveraged and reported lower earnings in 2022, though the company has not publicly released its 2022 results. However, Abanca Founder Juan Carlos Escotet recently told Faro de Vigo the company had sufficient cash on hand to avoid being forced into a sale.

"We are in no hurry,” Escotet said in early July.

A spokesperson for Cooke declined to provide any information about the negotiations to SeafoodSource. Nueva Pescanova Global Chief Marketing, Innovation, and Communication Officer Miguel Angel González Ezquerra told SeafoodSource "the news [is] not totally accurate."

"There has been no withdrawal of the offer but a negotiation process which continues, however, it will continue on September," he said. "The relationship between Abanca and Cooke is really good, but obviously a negotiation is a negotiation, and this one is not easy due to the size of the deal and the complexity of both companies. What is not true is the part of Abanca needing to sale quickly. Why would they delay negotiations to September if they needed to sell so fast?"

Following the withdrawal of Cooke’s offer, Escotet is reportedly in favor of a "return to square one" in the sale process, meaning the ending of its exclusivity agreement with Cooke.

Vigo, Spain-based Iberconsa, which is owned by U.S. investment fund Platinum Equity, and which was previously reported to be out of the bidding, remains interested in acquiring Nueva Pescanova, according to Faro de Vigo.

In the meantime, Cooke is planning to exhibit for the first time at Conxemar in October 2023, expanding its presence in the Spanish and larger European markets, and Nueva Pescanova has launched two new ready-to-cook products – prawns in a garlic sauce or in a tomato sauce, and a fish burger.

"With this launch, Pescanova wants to bring seafood products closer to consumers through nutritious, healthy, tasty, and quick-to-prepare solutions," the company said in a statement.

Photo by Cliff White/SeafoodSource