Canadian fish deal strikes legal snag

By LIBBY MIDDLEBROOK

Sanford has reeled in another 7 per cent of shares in seafood processor Fishery Products International, but its purchasing programme is still held back by a snag in Canadian legislation.

The New Zealand fishing company lifted its stake in FPI to 14.8 per cent this week as part of a $26 million FPI share-purchasing programme.

It is understood that Sanford is keen to further increase its stake in FPI, but the company is restricted because of Newfoundland and Labrador Government legislation which restricts investors from holding more than 15 per cent of a publicly listed company.

Sanford managing director Eric Barratt, who recently attended a meeting with FPI executives in Canada, said that while there was still a lot of work to be done, "15 per cent is a start. It's early days yet."

Mr Barratt said the Newfoundland and Labrador Government had indicated that it might make allowances under its share ownership restriction legislation if a "deal specific" merger or acquisition proposal was presented to it.

Mr Barratt refused to comment any further.

FPI, which was target of a hostile takeover by Canadian company Neos Seafoods in November, has 11 processing plants and sales and marketing offices in Canada, the United States and Europe.

Sanford, which exports fish to North America, Latin America, Europe and Asia, is keen to invest in high-value scallop, shrimp and crabmeat markets, areas where FPI has strong business interests.

Credit Suisse First Boston analyst Andrew Mortimer said Sanford's move to increase its shareholding in FPI appeared to be positive for the company and its shareholders.

"From Sanford's point of view, FPI seems to have a pretty healthy distribution network globally, which might be very good for the company.

"Acquisition or expansion of agricultural resource is a good way for Sanford to go."