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South Australian oyster producer Angel Seafood (ASX: AS1) has today received a non-binding proposal from agricultural fund manager Laguna Bay Group to purchase all of the shares in the company for $32.3 million.
The proposed deal of $0.20 per share represents a 60 per cent premium to Angel’s closing share price on 17 December, and has piqued the interest of the producer’s board which says it intends to engage further with Laguna Bay.
According to Angel Seafood, Laguna Bay has indicated the proposal was formulated based on several key assumptions, including a preference that the producer’s founder and CEO Isaac Halman and his associates retain a “significant proportion” of their shareholding in the company.
However, Angel notes the form and extent of such retention (if any) sought by Laguna Bay has not been confirmed.
The proposal is also subject to several key conditions, including Laguna Bay conducting due diligence, the fund manager receiving all necessary regulatory approvals, approval from Laguna’s investment committee, recommendation by the Angel board and the parties finalising a scheme of arrangement.
“Following careful consideration, and consultation with its advisers, the Board of Angel considers that it is in the best interests of Angel's shareholders to engage further with Laguna Bay on the Indicative Proposal,” Angel said.
“Accordingly, Angel has entered into an exclusivity deed and a cost letter with Laguna Bay to provide it with the opportunity to conduct due diligence on an exclusive basis to enable it to put forward a binding offer.
“The Board of Angel notes that there is no certainty that the Indicative Proposal will result in a binding offer or result in the entry into a scheme implementation agreement.”
The proposal comes after Angel was forced to pause production and sales out of its Coffin Bay, South Australia farm in November following an outbreak of vibrio parahaemolyticus in the region.
That led to an industry-wide recall of Oysters, but Angel was cleared to recommence production and sales on 14 December by the South Australian Department of Health and Wellbeing.
Shares in AS1 are up 40 per cent to $0.18 per share at 10.06am AEDT.
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