São Paulo, Brazil-based meat-processing firm JBS’ planned acquisition of Huon Aquaculture is facing a challenge from an aggressive share-buying scheme launched by billionaire Australian investor Andrew “Twiggy” Forrest.
Last month, before JBS said it would pay AUD 425 million (USD 313.5 million, EUR 266.1 million) in cash for Tasmania-based Huon, the largest family-owned and -operated vertically integrated salmon producer in Australia, Forrest purchased 7.3 percent of the company for around AUD 20 million (USD 14.8 million, EUR 12.4 million) through his holding group Tattarang Agrifood.
In a 10 August announcement on the Australian Stock Exchange, Huon announced Tattarang Agrifood had acquired additional shares to bring its ownership stake to 18.59 percent. When combined with the voting power of nonprofit superannuation and pension fund AustralianSuper, which owns 12 percent of Huon, the two parties could have the potential to stop the JBS deal, as JBS owns just 40.53 percent of Huon’s shares, according to Sam Baker, an adviser at Hobart, Tasmania, Australia-based Shadforth Financial.
"It certainly appears as if this move by Andrew Forrest is designed to extract some influence on the company," Baker told the Australian Broadcasting Channel.
In a statement posted on Tattarang’s website, Forrest said he hoped his investment could set Huon on a path to set higher environmental standards for its environmental and animal welfare performance.
“Our investment in Huon represents a clear commitment to achieve the industry change we want to see,” Forrest said. “Huon have demonstrated they want to be leaders in the pursuit of sustainable salmon farming practices, but my aspirations for this company are even greater. And there are a range of steps that can be taken by new ownership to achieve this. They include the replacement of fish in fishmeal, moving to completely carbon neutral production, and applying leading animal welfare standards and practices.”
Forrest said Tattarang’s investment team “will continue to review the specific shareholder offer as part of its investment position,” making it clear the group intends to exert some influence on Huon’s future, whether or not it is under the umbrella of JBS.
“We must all rise to the biggest challenge of Australia’s agricultural sector – food security and sustainability,” Forrest said. “Sustainability is the one factor that will guarantee jobs in agriculture, food on our plates, and farming practices that protect the planet, not harm it.”
In response to Forrest's comments, Huon Aquaculture CEO Peter Bender issued his own statement defending Huon’s environmental and fish-welfare practices and touting the company's RSPCA Assured certification.
“Like terrestrial farmers, we are stewards of our farms and stock and that is paramount to the decision-making behind all our business practices. Huon does not believe there is any higher animal husbandry goal to achieve than RSPCA certification, and we call upon Mr. Forrest to outline which program he believes is better than RSPCA certification," Bender said. “Huon wanted to be benchmarked against the best standards in the world because fish-welfare remains essential to every aspect of what we do which is why we lobbied RSPCA Australia to develop the salmon standards in the first place."
Bender said Forrest had not had a direct conversation with him about his concerns.
"If Mr. Forrest had bothered to check with me, he would know that our stocking density of maximum 1 percent fish to 99 percent water is the best in the world across the global salmon farming industry," Bender said. "Mr. Forrest can rest assured that every Huon fish is grown and harvested under the principles of 'no pain, no fear'; Indeed, it was this company that led the salmon-farming world in these harvest principles."
Photo courtesy of WikiMedia Commons
