Australia's Yumbah bids for major yellowtail farmer

Clean Seas (CSS) reported to the Australian Stock Exchange overnight that it had received a "non-binding, indicative and incomplete proposal" from Yumbah Aquaculture to merge with CSS.

Clean Seas is involved in the full cycle breeding, farming, processing and marketing of yellowtail kingfish in South Australia.

Yumbah is an aquaculture company that delivers farmed shellfish from spat through to harvested products.

With operations in South Australia, Victoria, Tasmania and New South Wales, it is the largest producer of abalone in the Southern Hemisphere, specialising in onshore production of this prized shellfish. It also produces oysters, mussels, aquafeed and oyster spat.

Yumbah is proposing an acquisition of 100% of CSS shares by way of a scheme of arrangement offering $0.14 cash per share with a scrip alternative in Yumbah.

Clean Seas was formed by the Stehr Group in 2000 and was publicly listed on the Australian Stock Exchange five years later. The company’s initial purpose was to cultivate southern bluefish tuna as well as other species including yellowtail kingfish.

Today, Clean Seas focuses its efforts solely on the sustainable, closed cycle production of yellowtail kingfish.

Under the terms of the proposal, CSS shareholders would, as the default consideration, receive total cash consideration of $0.14 per share, or Yumbah scrip based on eligibility requirements.

The proposal’s cash consideration of AUS $0.14 per share represents a premium of 52.2 per cent to the closing price of $0.092 on February 18.

CSS and Yumbah have entered into a process deed under which Yumbah has been granted until March 24 to undertake exclusive due diligence and negotiations on a binding SID (scheme information document).