Australian aquaculture company Clean Seas Seafood Ltd (CSS) has received a non-binding, indicative and incomplete proposal from Yumbah Aquaculture Ltd to merge with CSS through the acquisition of 100% of CSS shares by way of a scheme of arrangement offering AUD 0.14 cash per share with a scrip alternative in Yumbah.
Yumbah is an Australian-owned vertically integrated investment grade shellfish aquaculture portfolio with operations in South Australia, Victoria, Tasmania and New South Wales. The company delivers produce from spat through to harvested products – supplying farmers, wholesalers and retailers with sustainably farmed shellfish.
It is the largest producer of abalone in the Southern Hemisphere, specialising in onshore production. In addition, the group produces oysters, mussels, aquafeed and oyster spat.
In a filing with Euronext Growth (Oslo), CSS advises that Anthony Hall is a director and the largest shareholder of Yumbah with a ~53.6% ownership and is Clean Seas’ largest shareholder with a current ownership of ~22.6%. CSS director Gary Higgins also serves as a director and Chairman of Yumbah.
Under the terms of the proposal, CSS shareholders will, as the default consideration, receive total cash consideration of AUD 0.14 per share. As an alternative to the cash consideration, eligible CSS shareholders may elect to receive Yumbah scrip.
CSS shareholders who elect to receive scrip will have ongoing economic exposure to the merged Clean Seas and Yumbah business.
The exact CSS to Yumbah share ratio (for the scrip alternative) will be determined at a later stage, subject to the relative value of Yumbah scrip.
CSS’s Board has established an independent committee of directors (IBC) to evaluate and negotiate the terms of the proposal.
The proposal is subject to a number of conditions. It will be funded through a combination of debt and, to the extent eligible CSS shareholders elect to take Yumbah scrip consideration, Yumbah equity.
The IBC has determined that it is in the best interests of CSS shareholders to progress the proposal and allow Yumbah to undertake further due diligence.
Clean Seas is focused on the full-cycle breeding, farming, processing and marketing of its Hiramasa or yellowtail kingfish (Seriola lalandi). It is the largest producer of of the fish outside of Japan.
