SOUTH AFRICA – South African fishing and food company, Sea Harvest, has entered into a binding bid implementation agreement with its 56.3% held Australian subsidiary – Mareterram – to potentially acquire all its ordinary shares in the firm.

Sea Harvest, which is controlled by empowerment group Brimstone, seeks to boost market share and growth.

Felix Ratheb, Sea Harvest’s chief executive officer explained that 100% ownership of Mareterram would accelerate growth including diversifying earnings, increasing market share and support the Australian company’s growth strategy. 

The firm said this will allow Sea Harvest to fully integrate Mareterram, extract operational synergies and align Mareterram’s operating structure, growth strategy and funding requirements with that of Sea Harvest.

Sea Harvest is offering US$0.18 for each Mareterram share, valuing the issued capital of the Australian fishing and processing company at about US$27.53million.

Sea Harvest first acquired a 19.9% interest in Mareterram in 2016.

The deal is subject to the satisfaction or waiver of various conditions, including Sea Harvest having a relevant interest in at least 90% of Mareterram shares during or by the end of the proposed offer, as well as approval in terms of the Australian Foreign Acquisitions and Takeovers Act.

Mereterram’s board pointed out that the offer represents a 31% premium over the 30-day volume, weighted average price of the company’s shares prior to the announcement of the deal.

For the financial year ending December 2018, Mareterram reported decrease in revenues to US$32.09 million from  US$ 34.23 million the previous financial year.

Subsequently, its profit dropped to US$2.14 million which the company attributed to a significant decrease in prawn catch. 

The company also reported lower scallop catches and a below-expectation haul in its recently acquired mackerel fishing business.

Looking ahead, Mareterram said it is considering a range of strategies to optimise prawn spawning, recruitment and protection to ensure a rebound in prawn catch rates at its Shark Bay fishery.

The company also undertook significant restructure and cost reduction initiatives over the last 12 months and stated its plan to maintain the reduced level of overheads in 2019.

This comes after Sea Harvest, popular through its frozen hake cuts, acquired Viking Fishing as well as Ladismith Cheese Company last year.