ASX Announcement – Huon Aquaculture Group Limited (ASX: HUO) (“Company”, “Huon”), 6 August 2021
RECOMMENDED ACQUISITION OF HUON BY JBS
Highlights
Huon has entered into a Scheme Implementation Deed with JBS to acquire 100% of Huon shares by way of a Scheme of Arrangement
Under the terms of the Scheme, Huon shareholders will receive A$3.85 cash per Huon share
Huon’s Board intends to declare a fully franked Special Dividend of up to A$0.125 per Huon share prior to implementation of the Scheme, which would enable Huon shareholders to realise additional benefits from franking credits of up to A$0.05 per Huon share1
Huon’s Board considers the Scheme to be in the best interest of Huon shareholders and unanimously recommends that Huon shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding the Scheme is in the best interests of shareholders
Each Huon Director, including Huon’s founding and major shareholders, Frances and Peter Bender, intends to vote all the shares held or controlled by them in favour of the Scheme to the extent those shares are entitled to be voted in the Scheme (representing up to approximately 53% of Huon’s issued shares)
Huon shareholders do not need to take any action at this time
Overview of the Scheme
Huon Aquaculture Group Limited (ASX: HUO) (“Company”, “Huon”) announces it has entered into a Scheme Implementation Deed with an Australian subsidiary of JBS S.A. (“JBS”) under which it is proposed that JBS will acquire 100% of Huon for a cash consideration of $3.85 per share (“Scheme Price”) by way of a scheme of arrangement (“Scheme of Arrangement” or “Scheme”).
The Scheme values Huon’s equity at approximately $425 million on a fully diluted basis2 .
The Scheme Price of $3.85 in cash represents a:
61% premium over the undisturbed closing price of $2.39, being the last traded price on 26 February before the strategic review was announced;
43% premium over the 3 month volume weighted average price3 of $2.69; and
38% premium over the closing price of Huon shares of $2.79 on 6 August 2021, the last trading day before this announcement.
The Huon Board also intends to declare a fully franked special dividend of up to $0.125 per share immediately prior to implementation of the Scheme (“Special Dividend”). The Special D Huon Board whether the dividend is ultimately declared and paid. If the Special Dividend is paid, the Scheme consideration would be reduced by the cash amount per share of any such dividend.
Unanimous Recommendation of Huon Board
In the absence of a superior proposal and subject to the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of Huon shareholders, the Huon Board unanimously recommends that Huon shareholders vote in favour of the Scheme.
Subject to those same qualifications, each Huon Director, including Huon’s founding and major shareholders, Peter and Frances Bender, intends to vote all the shares held or controlled by them in favour of the Scheme to the extent those shares are entitled to be voted in the Scheme (representing up to approximately 53% of Huon’s issued shares).
The Scheme is subject to limited conditions and is not subject to financing or due diligence.
Huon’s Chairman, Mr Neil Kearney, stated: “Having fully considered a range of alternatives as part of a comprehensive strategic review process, the Board believes this transaction provides Huon shareholders with an opportunity to realise significant value for their shares. The Scheme provides certainty for Huon shareholders and a compelling premium in cash to recent trading prices for Huon shares.”
Huon’s Managing Director and Chief Executive Officer, Mr Peter Bender, stated: “The recommended acquisition of Huon by JBS represents an excellent outcome for our shareholders, partners and staff. This is a testament to the strong position Huon holds in the Australian salmon market. We look forward to seeing the continued growth of the Huon business as part of JBS. We do not anticipate any disruption to business operations.”
JBS Australia’s President and Chief Executive Officer, Mr Brent Eastwood, stated: “Our acquisition of Huon enables us to further grow our Australian protein business and strengthen our presence with consumers and customers. We look forward to continue growing on the leading salmon business Huon has created and working with its employees, customers and stakeholders to help the company realise this next phase of growth.”
Transaction Structures
Under the Scheme Implementation Deed, Huon’s shareholders will be asked to approve two alternative transactions at the Scheme Meeting. The price to be paid by JBS to all Huon shareholders, including Huon’s founding and major shareholders, Peter and Frances Bender, under the Proposed Structure or the Alternative Structure will be the same. The alternative transaction structures comprise:
Proposed Structure1 : involving the sale to JBS of the Bender family’s investment company Surveyors Investments Pty Ltd (“Surveyors Investments”) which holds approximately 40% of Huon shares and no other assets (for a purchase price equal to the Scheme Price multiplied by the number of Huon shares held by that company) and the acquisition by JBS of all other Huon shares under the Scheme. Under the Proposed Structure, the Bender family has agreed to provide non-compete undertakings in favour of JBS for a period of up to four years and the shares in Huon held by Surveyors Investments will be excluded from the Scheme and will not be voted at the Scheme Meeting; or
Alternative Structure1 : if the Proposed Structure is not approved and the Alternative Structure is approved then the Scheme will not involve a sale of Surveyors Investments to JBS. Instead, JBS will directly acquire 100% of Huon’s shares under the Scheme and the Bender family will vote all of their directly or indirectly controlled shares in Huon, representing approximately 53% of the shares outstanding on a fully diluted basis, in favour of the Scheme. In this Alternative Structure the non-compete undertakings in favour of JBS will still apply.
Scheme Implementation Deed
Implementation of the Scheme is subject to certain customary conditions including Huon shareholder approval, approval by the Federal Court of Australia and the Australian Foreign Investment Review Board; there being no material adverse change, prescribed occurrence, restraints or material breach of warranty by Huon; and the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of Huon shareholders.
The Scheme is not subject to any financing or due diligence conditions. JBS has informed Huon that it will fund the transaction using existing cash resources and undrawn debt facilities.
A copy of the Scheme Implementation Deed is attached to this announcement and contains customary exclusivity provisions including no shop, no due diligence and no talk restrictions, as well as notification obligations and a matching right.
The Scheme Implementation Deed also details circumstances under which Huon may be required to pay JBS a break fee of $4.25 million or approximately 1% of equity value and circumstances where JBS may be required to pay Huon a reverse break fee of $4.25 million.
Indicative Timetable and Next Steps
Huon shareholders do not need to take any action at the present time.
A Scheme Booklet, containing information relating to the proposed acquisition, both transaction structures and details of the shareholder meeting is expected to be sent to Huon shareholders in late September 2021. It will also contain an Independent Expert’s Report on whether the Scheme is in the best interests of Huon shareholders.
Huon shareholders will then have the opportunity to vote on the Scheme at a shareholder meeting, currently expected to be held in mid to late October 2021.
Subject to the conditions of the Scheme being satisfied or (if applicable) waived in accordance with the Scheme Implementation Deed, the Scheme is expected to be implemented in November 2021.
These dates are indicative only and are subject to change.
Huon’s financial adviser is Grant Samuel and its legal adviser is Ashurst.
This announcement has been authorised by the Huon Board.
Media release – Tasmanian Alliance for Marine Protection (TAMP), August 6, 2021
Tasmanians will reject Huon Aquaculture’s buy-out by a multinational with a rogue reputation
Tasmanians need to feel sickened by the announcement that Peter and Frances Bender are selling out their business to Brazilian multinational, JBS.
This is a company associated with industrial scale corruption (a), tax evasion (b) and, in Tasmania, the closure and sacking of Tasmanian workers (c & d).
The Tasmanian Alliance for Marine Protection (TAMP) vows to step up the fight to preserve Tasmania’s beautiful coastlines and waterways from the onslaught that will follow.
No good can come of the sell-out and communities around the state will stand together to oppose a giant multinational that has already shown its utter disregard for Tasmania and Tasmanians.
- https://thehill.com/policy/
finance/521070-owners-of- meatpacker-jbs-to-pay-280m- fine-over-foreign-bribery- charges - https://www.reuters.com/
article/jbs-merger- investigation-idUSL2N1670H3 - https://www.abc.net.au/news/
rural/2012-10-25/jbs-refuses- to-sell-or-lease-king-island- meatworks/6301590 - https://www.beefcentral.com/
processing/jbs-shuts-king- island-plant-in-southern- rationalisation-move/
