Don’t take me over
In what was called "the takeover bid that wasn’t," Clearwater Seafoods seems to have ably protected itself from a hostile takeover bid by the founders of Cooke Aquaculture, the $500 million New Brunswick aquaculture multinational. Glenn Cooke and his family are known to be successful and ruthless pursuers of business opportunities and have amassed a virtual monopoly of the salmon aquaculture industry in Atlantic Canada.
The firm has been the recipient of millions of dollars in government grants and loans in New Brunswick and Newfoundland and has reportedly asked the Nova Scotia Government for up to $100 million in support for their planned expansion here. Cooke has expanded ni recent years, buying existing operations in Maine, Chile and Spain.
In September of 2011, Cooke Aquaculture put in an offer for Clearwater Seafoods, apparently catching investors off guard. Clearwater’s three largest shareholders include founders John Risley and Colin MacDonald, who hold almost 60 per cent of the shares, ultimately blocking the Cooke bid for control of Clearwater’s convertible debentures, which could have been converted into common shares. To stop the bid, Clearwater formed a special committee to assess the bid, declaring it a lowball price and rejecting the takeover.
Since then, Clearwater’s profits have surged back, with recent year-end earnings before interest, taxes, depreciation and amortization jumping from $50.6-million in 2010 to $60-million in 2011.
Since the failed bid, Cooke Aquaculture has been beset with a multitude of problems, including 99 federal charges against senior executives for illegal use of pesticides, resulting in the death of thousands of lobsters in the bay of Fundy. The firm was also fined for misuse of chemicals for treating a sea lice infestation at one of their farms.
In late 2011, Cooke’s Chilean subsidiary was cited by government authorities there as having several of its farms "under suspicion" of the deadly infectious salmon anemia virus (ISA), resulting in the January, 2012 order for them to slaughter 300,000 or more fish at one site.
In February and March of this year, Cooke’s facility in Shelburne saw an outbreak of the deadly ISA virus, resulting in the slaughter of up to 600,000 salmon, one-third of which were ordered destroyed by the Canadian Food Inspection Agency (CFIA).
This week, Cooke employees have been observed removing thousands of more fish from the salmon cages onto refrigerated trailers parked on the Shelburne Government Wharf. Cooke public relations executives say that none of their recent problems affects their plans for the $150 million processing facility planned for Shelburne in 2012, but it is now unlikely that work on the plant would begin until 2013 or later.
The pesticide charges are moving through the courts, with the next hearing schedule in St. John next week. The ISA infection in Shelburne is being monitored by the CFIA.