Foreign sale moves closer as Sealord Group bids heat up

By Jock Anderson

Friday 5th May 2000

GROWING TRADE: Sealord, the 'biggest' fishing company in the southern hemisphere, has annual revenues of $500 million.

Brierley Investments' half stake in Sealord Group moved closer to logical foreign sale as shortlisted bidders wooed the fishing company's other parent, the Treaty of Waitangi Fisheries Commission.

A South African bid is tipped as one most likely to add significant cash value to Sealord's global marketing strategies.

Observers said a New Zealand bidder, cosseted by political support, would want the shares at a cheaper price.

Such an outcome would devalue the fisheries commission stock and severely damage the Maori holding in Sealord.

Binding bids for the BIL shares, valued between $143 million and $210 million, close today.

The commission owns 50% of Sealord, New Zealand's biggest fishing company and has a pre-emptive first bite at BIL's half.

Fisheries commissioners, whose primary function is to aid Maori into the business of fishing and promote and protect Maori fishing interests, do not have the power to veto any bid.

But they are already caught up in powerful political machinations surrounding the sale of the shares to foreigners ahead of New Zealand interests.

Five bidders, including New Zealand Seafood Investments - owned by listed Sanford and Amaltal Corp, the latter a joint venture between privately owned Talley's Fisheries and Amalgamated Marketing - put their cases to the commission at Wellington law firm Bell Gully last week.

New Zealand Seafood Investments' application to acquire the BIL shares has Commerce Commission approval.

Supporting the sale of the shares to New Zealand interests but not bidding itself is Seafood Consortium - a loose body formed in 1995 and made up of smaller fishers including Christchurch companies Independent Fisheries, United Fisheries and Ngai Tahu Fisheries, Deep Cove Fisheries of Timaru and Tainui deep-sea fisher Raukura Moana Fisheries of Hamilton.

Former youth affairs minister turned PR spin doctor Deborah Morris has also been promoting the Talley's/Sanford interests around Parliament, a move unlikely to curry much favour in view of Peter Talley's alleged support for previous National administrations.

In full-page newspaper advertisements last weekend Seafood Consortium raised the bogey the Sealord stake was "about to be sold to foreigners," as if there was something inherently or terminally wrong with that. Seafood Consortium chief executive Peter Dawson said the government could prevent an overseas sale by declining an application to the Overseas Investment Commission.

Calling on the government to keep Sealord in Kiwi/Maori hands Mr Dawson said it would be "a tragic mistake to allow this valuable resource to be sold to foreign interests," when Maori now had the option to buy the Brierley shares.

Other known bidders include unnamed South African, Japanese, Canadian and Spanish-Japanese consortiums, which, if successful, would require Overseas Investment Commission approval.

That may not a major hurdle because it is company shares being sold, not fishing quota.

The Fisheries Commission is unlikely to take up its option to match any favoured bid, partly because of cost and partly because Prime Minister Helen Clark, aghast at Tainui's financial disaster, is understood to disapprove of too much Maori control.

The commission already has an interest in more than 226,000 tonnes of quota - 35 % of the total commercial catch - and because of its existing international joint ventures and its well known business culture of maximising returns by pursuing global value-added markets, is expected to favour working with a foreign partner.

Commission chairman Sir Tipene O'Regan said it would be a few weeks before the commission had a view on either a preferred partner or how it might otherwise proceed.

He said Brierley Investments still had to decide if it would sell its shareholding.

If BIL chooses a buyer it has to give the commission one week's notice, followed by 30 working days' notice to match the bid.

Any disposal of the BIL shares is likely to end up in long and costly court action.

In its 1999 annual report Nelson-based Sealord claimed to be the biggest fishing company in the southern hemisphere, holding about 25% of New Zealand's exclusive economic zone fishing quota and with revenues topping $500 million.

The overall value of the fish trade rose 17% in the early part of 1999, with total exports for the year expected to exceed $1.4 billion.

The big question, if BIL decides to sell to anyone, is whether a New Zealand bidder has adequate marketing, management and fishing skills to not only maintain but advance Sealord as one of the world's best performing fishing companies. Sale finely balanced - page 20

Comments from our readers

No comments yet