Newfie fish row knocks Sanford

By PAULA OLIVER

A Canadian fishing company partly owned by local fish giant Sanford is at the centre of a shareholder attempt to oust its board of directors and sack its management.

Newfoundland-based Fishery Products International (FPI), in which Sanford holds a 14.8 per cent stake, catches, processes and markets fish in the United States, Canada, China and Europe.

Sanford investigated FPI as part of its expansion plans in 1999, and gradually built up its stake over the past year at a cost of around $26 million. But just as it made its first move on FPI, a consortium of other fishing companies, known as NEOS Seafoods, launched a hostile, and ultimately unsuccessful, takeover attempt on FPI.

It now appears that at least one of the three parties involved in the takeover attempt is launching another effort to gain control of FPI.

Since the failed takeover, three parties - Nova Scotia's Clearwater Fine Foods, Iceland's Icelandic Freezing Plants Corporation, and Canada's Barry Group have each taken stakes of almost 15 per cent in FPI. All three are major competitors for FPI, and are said to have been part of the failed consortium.

Sanford is the only other party to have also increased its stake. It has been widely speculated that Sanford was keen to increase its stake even further, if the Newfoundland 15 per cent restriction law could be relaxed.

Yesterday FPI chief executive and chairman Victor Young said he was aware that a key player in the failed hostile takeover - Clearwater president John Risley - was actively recruiting people to make up an alternative board of directors.

Sanford managing director Eric Barratt said he would not comment on the issue until he learned more about it.

An analyst, who would not be named, told the Business Herald yesterday that if Sanford did not support the alternative board move, it could end up holding its share and see control go to the other parties, making it difficult to take a bigger stake.

He said that if other players thought FPI could be better managed, it was likely Sanford did too.