PE firms Bain Capital, Altor table a $1.1-bn bid for Cermaq's fish feed unit EWOS

Private equity firms Bain Capital and Altor Equity Partners today tabled a $1.1 billion (6.2 billion kroner) bid for Norwegian salmon farmer Cermaq's fish feed unit EWOS, complicating a $1.7-billion hostile bid for the entire company from Marine Harvest.

The offer implies an enterprise value of 10 times the market consensus EBIT for EWOS in 2013.

Cermaq, which is 43.5-per cent owned by the government, said that the offer is substantially higher than the implicit value of EWOS in the historical valuation of the Cermaq share as well as compared to the offer from Marine Harvest.

Marine Harvest, controlled by Norwegian billionaire John Fredriksen, had on 30 April launched an unsolicited 105 kroner per share bid for Cermaq, comprising of 53 kroner in cash and 52 kroner in shares.

The hostile deal was subject to a number of conditions including receiving two-thirds of the shares and Cermaq not going through with its proposed $732 million acquisition of Peruvian fishmeal company Copeinca ASA.

Cermaq rejected the offer saying that it undervalued the company and came with unacceptable conditions.

It also said that it would go ahead with its plan of acquiring the nearly 50 per cent shares it does not already own in Lima-based Copeinca, the world's largest exporter of the salmon feed ingredients by volume and would hold talks with investors on the sale of assets.

Cermaq would use some of the money from the sale to pay down debt and also pay out NOK 4 to 5 billion to shareholders, or between 43 and 54 NOK per share.

Cermaq said that it believes after a potential completion of a sale of EWOS, it will continue its efforts to further develop the company's farming activities in Norway, Canada and Chile.

EWOS is the largest global salmon feed supplier by volume. It supplies extruded feeds for the full life cycle from hatch to harvest of salmonids and pangasius, and has operations in all four salmon-producing countries, Norway, Chile, Canada and the UK.

It has also entered the Pangasius (white fish) feed market in Vietnam. EWOS Vietnam is a joint venture with local partner Anova. The company produces feed for the pangasius feed market in Souht East Asia. EWOS Vietnam has its plant in Ben Luc, Long An Province outside Ho Chi Mihn City.

EWOS employs more than 1,000 people and has an annual turnover of 10.3 billion kroner.