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Bid targets Clearwater Seafoods
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The Globe and Mail- New Brunswick-based Cooke Aquaculture Inc. has made a bid to buy up units of Clearwater Seafoods Income Fund (CLR-UN-T) not already owned by major stakeholder Clearwater Fine Foods Inc.
Cooke, which currently holds 20.2 per cent of the fund's units and 10.9 per cent of voting rights, has offered $3.50 for the units and intends to also buy up the fund's convertible debentures and convert them to stock, the Clearwater fund said Friday. The bid would value the fund at about $97.1-million.
The fund's units nearly doubled in value in early trading on the Toronto Stock Exchange, rising $1.50 to $3.05.
However, the fund said its major unitholder Clearwater Fine Foods (CFFI), which holds 48.2 per cent of voting rights, has not only refused to sell any of its 4.6 per cent equity stake but also told the fund's board it does not believe the Cooke bid is a fair one.
“Additionally, CFFI have told the Trustees it believes there are other unitholders which together with CFFI would hold over 50 per cent of the fully diluted units who would share CFFI's views in this respect,” the fund said in a statement.
The Clearwater fund said its trustees will review the proposal, which would have no effect on Clearwater's plans to convert to a corporate structure from an income fund by the end of the year.
In its second-quarter financial results released Friday, the fund said its operating division Clearwater Seafoods LP saw a net loss of $332,000, down from a loss of $5-million in the same period a year earlier. Earnings before income tax, depreciation and amortization rose to $12-million from $8.3-million.
“Management are encouraged by the second quarter and year-to-date 2011 results and the increasing global consumer and customer demand for our premium, wild, sustainably harvested seafood,” said chief executive Ian Smith.
“Market demand for our products is strong across all major segments and we have every expectation that our business momentum will continue in 2011.”
Sales rose to $78.8-million from $70.8-million on improved prices and a shift to higher margin species despite lower volumes due to refit work on its fleet.
Clearwater has 1,600 employees, about 20 vessels, seven plants and offices in Toronto, Europe, China, Japan, Europe and the United States.
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