http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_61A1FC37EC2A555848257B360045747C/$file/CFGL-PressRelease_22032013.pdf?openelement

" The group has at most until April 15, when China Fishery’s tender offer ends, to come out with a competing offer." We should know the result by 15 April 2013.

Since it is already ex rights, why are people wanting to buy now ??? 

For your reading pleasure...(extract from Undercurrent News, 20 Mar 2013)

Pressure mounts on Copeinca family in tug of war with China Fishery

The continuing high trading price of Copeinca’s shares seems to indicate speculators are betting on a higher counter-bid to emerge. Shares opened and closed at NOK 60 on Tuesday, March 19.

However, China Fishery’s ability to secure 9.9% of shares right before its tender offer started was quite a coup, and could make it more difficult for the Dyer Coriat to find interested industry buyers, said one observer.

“I feel the situation has become more acute. It is critical now for the Dyer-Coriat to find a rival bidder,” a Norwegian analyst, asking to be quoted unnamed, said.

Under Norwegian law, if someone owns 90% of a company’s shares, they can squeeze out the minority shareholders. However, with China Fishery almost assuring itself control of 10%, industrial buyers might be harder to persuade.

“The problem with China Fishery owning 10% is that it would make it harder for a buyer to delist the company and make it private, if CFG won’t give up the stake,” said the Norwegian analyst.

Not everyone agrees with this view, however. Two other analysts said the stake “should not be a problem”. If someone offers to pay a substantial premium to current prices, then China Fishery should be willing to sell along with the Dyer family, said one of the analysts. That said, “having China Fishery as shareholder with 10% is obviously not ideal for the family, or a potential buyer,” he said.

“If you look at list of shareholders who have supported or accepted China Fishery’s bid, you’ll see China Fishery has gone pretty wide and low on the list of shareholders to find accepting sellers”

On March 4, Copeinca said it has engaged Carnegie, UBS and DNB Markets to advise it on strategic options and find rival bidders.

However, two weeks on, and seven days after the start of China Fishery’s tender offer, no news of a rival offer has come out.

The group has at most until April 15, when China Fishery’s tender offer ends, to come out with a competing offer.

Views diverge on the prospects of a counter-bid. “I’m not extremely optimistic about bidders coming up with higher bids,” said the afore-mentioned analyst, who believes the valuation of the Dyer Coriat family is probably too optimistic.

Others disagree. The fairly low bid from China Fishery, compared to past valuations for Peruvian quota holders, indicate that “you could potentially expect a higher bid to emerge”, said Knut Ivar Bakken, analyst at DNB Markets. The latter is advising Copeinca on its strategic options.

That is the same argument put forward by the Dyer Coriat family, which has argued that, based on past acquisitions of Peruvian fishing quotas – incuding by China Fishery – Copeinca should be worth around $1 – 1.1 billion. Analysts at Nordea and Carnegie (which now advises Copeinca) have similarly argued a fair value would be closer to $900m.

However, comparing to these smaller transactions is misleading, said a local source. “Based on previous transactions, you may expect higher multiples. But a deal of this size would be unprecedented. The previous transactions were for very small quota shares.”

In his view, only a buyer seeking to secure access to its own fishmeal demand, or someone willing to pay a premium for a controlling stake, would pay significantly above the current offer. “If you are already in the fishmeal industry, you wouldn’t buy at $100m per percentage of quota.”

Nordea is among the banks who advised shareholders not to sell, issuing a hold rating at NOK 60 on Copeinca’s share, or NOK 57.35 when taking into account the dividend, on Feb. 28. DNB Markets had a buy rating of NOK 51 prior to the bid, and has now suspended its recommendation and target price to the bank’s involvement in the process.

Analysts and industry sources canvassed by Undercurrent News were also uncertain over the nature of a potential counter-bidder.

The prospect of a European industry buyer is low, they said, suggesting instead that more likely bidders could emerge from Asia, pointing to Dongwon Industries’ interest in Pesquera Diamante.

One Norwegian analyst also suggested TASA, Peru’s largest fishing group and fishmeal producer. However, TASA has been focusing on diversifying its operations, and is unlikely to be interested, said the local source.

The second option, all agreed, is that the Dyer Coriat family will try to team up with a financial partner to come up with a joint bid.

The financial health of the Dyer Coriat – described as a prominent family in Peru — is another unknown factor. The family owns interests through Dyer Coriat Holdings, which is also the majority owner of Camposol, an agri-business group that recently expanded in shrimp farming.

Dyer Coriat Holdings is “one of the most successful family business groups in Peru over the past years,” said a statement by Camposol in its 2007 annual report.

The holding has diversified into the mining, agro-industrial and real estate and construction with Apurimac Ferrum, Ausinca, Campoinca and IC Viviendas, said Copeinca’s 2010 annual report.

However, the family is suspected – though not known – to be somewhat strapped for cash, which would also explain the delay in coming up with a counter bid. “My impression is that they own large assets but have stretched themselves a bit too much,” said one Norwegian analyst.

Supporting this assumption is a notice from last December, which shows that the Dyer Coriat Holding used Copeinca shares as collateral in a warrant agreement that it secured with a bank as part of a refinancing. Under the agreement, the bank was given the right to purchase 141,667 shares in Copeinca at $0.01 per share, with the number of warrants to be purchased increasing every quarter as long as the loan remains outstanding, to up to 1.117m shares by the end of 2015.

The deciding shareholders

With the Dyer Coriat family controlling 38.6% of shares and China Fishery claiming support from shareholders owning 41.5% of shares – of whom, albeit, all except 9.9% can opt out if a higher offer comes out – the jury is out on the bid’s outcome.

The onus lies on the 19.9% undecided shareholders, said analysts.

Even though the family, and some analysts, have said the bid undervalues the company, Copeinca’s vulnerability lies in the fact that most its shareholders are fund managers, for whom the offer does represent a quick upside.

So far, indications are that a large share of the 19.9% undecided also considered the bid to be too low. “If you look at list of shareholders who have supported or accepted China Fishery’s bid, you’ll see China Fishery has gone pretty wide and low on the list of shareholders to find accepting sellers,” said Bakken.

Copeinca’s current share levels also suggest investors are betting on a counter-bid to emerge. Shares have been consistently trading at above NOK 58 since early March, opening at NOK 60 this Tuesday.

Three scenarios

From shareholders’ perspective, there seem to be three possible outcomes to China Fishery’s hostile takeover of Copeinca.

The first scenario is one where China Fishery’s current bid of NOK 53.85 is successful. This would see the share price drop from its current high of around NOK 60, to the level of China Fishery’s offer, which implies a lower upside to shareholders.

The second is one where China Fishery’s offer fails, and Copeinca also fails to find a rival bidder. This has the risk of sending the share price even further down, back to levels prior to China Fishery’s offer, so around NOK 44.

The third and best case scenario for investors, finally, is the one in which Copeinca does find a counter-bidder.

Seen from this perspective, it makes sense that shareholders would sell now, to buyers betting on a counter offer, said one industry player.

Industry leader

The Dyer Coriat family were the founders of Copeinca. The company is their “baby, there is no way they will sell”, one industry source, who does business with them, had told Undercurrent when news of China Fishery’s bid first broke out on Feb. 26.

The family has certainly taken the company a long way, since it was created in July 1994. The main founding partners, according to Copeinca documents, were Dyer Ampudia, Rosa Coriat Valera, Edward Dyer Ampudia and Samuel Dyer Ampudia.

The company has also acquired a good reputation in the industry. “It’s a very good company. They have 100% delivered on their strategy laid out when they listed on the Oslo stock exchange, first consolidating the industry and then growing their EBITDA and improving production and efficiency as projected,” said Bakken.

It’s one of the “leading companies in the industry”, said another local source. “They were one of the first to move towards efficiency after the individual transferable quotas system was introduced.”

Management has also proved reasonable, for instance staying away from acquisitions, which they did not consider a good use of their finances, he said.

Copeinca is the second largest fishing group and fishmeal producer in Peru, with a quota share of 10.7%, 28 vessels and five fishmeal plants (see table further down).

The company has more than doubled its earnings before interests, taxes, depreciation and amortization (EBITDA) since 2009, exceeding $100m in 2012. This was achieved despite production dropping – from more than 210m metric tons of fishmeal and oil in 2009, to 151.9m metric tons in 2012, a year badly hit by low anchovy catches.

The debt ratio has also decreased, from 2.64x in 2009, to 1.78x last year.

In comparison, the largest player, TASA, owns 14.1% of quotas, while China Fishery controls 6.2%.

13% of exports

A report seen by Undercurrent showed TASA accounted for more than a fifth (22.5%) of Peru’s fishing exports in 2012, with exports of $521.7m. Copeinca had exports of $292m, or 12.7%.

Five other companies had exports of $160m-$205m, accounting for 7% to 9% of exports. These were, in order of size, Pesquera Diamante, Austral Group (part of Austevoll Seafood), Pesquera Exalmar, Pesquera Hayduk and China Fishery Group Investment. Another dozen and more companies then had exports of less than $50m.

Source: Copeinca company presentation, March 2013.

With revenues of $274m in 2012, Exalmar is a sizeable player. However, the company has shown more interest in being acquisitive than in selling, and is thought to focus more on the human consumption segment.