Sanford pursues Canada fisher

By LIBBY MIDDLEBROOK

Fishing company Sanford still plans to lift its stake in a Canadian seafood processor despite the company being subject to a hostile takeover.

During the last fortnight Sanford has paid more than $10 million for 8.11 per cent of shares in Fishery Products International, which is the target of a C$142 million full takeover by Canadian company Neos Seafoods.

Sanford managing director Eric Barratt said the company was not buying shares in Fishery Products to make a "quick buck". He said Fishery Products complemented Sanford's existing operation and the company viewed its shareholding as a long-term investment at present.

"We were studying Fishery Products at about the same time that Neos moved, that was a coincidence. Many of its activities are similar to ours and there is some common interests...we decided it was undervalued.

"I don't think our strategy will change at all. We're going to 10 per cent, we're not there to make a quick buck," he said.

Fishery Products has 11 processing plants and sales and marketing offices in Canada, the United States and Europe. The company's harvesting and processing operations include five deep-sea trawlers, five scallop draggers and a shrimp freezer trawler.

It is understood that the Fishery Products largest shareholder holds a 15 per cent stake while Fishery Products directors own less than 1 per cent of shares combined.

Neos, which plans to remove Fishery Products from the Toronto Stock Exchange if successful in its bid, is jointly owned by Barry Group of Companies, Clearwater Fine Foods and Icelandic Freezing Plants.

Mr Barratt said he had been approached by both Fishery Products and Neos on an informal basis since Neos' takeover bid was announced last month. If Sanford gains 10 per cent it would become one of its largest shareholders as well as being the only independent fishing company with a significant shareholding.

"We'll have another look at it when it gets to 10 per cent."

Meanwhile, the market seems a little confused by Sanford's move. Analysts were at a loss to explain why Sanford would only want to take a 10 per cent position in Fishery Products. A 10 per cent holding would give Sanford little influence over of Fishery Products's operation.

"It doesn't make a lot of sense long term," an analyst said.

Mr Barratt said: "A 10 per cent shareholding is very small, but it is in a large organisation that doesn't have any other fishing interest shareholders."

Sanford, which exports fish to North America, Latin America, Europe and Asia, posted a record full-year profit for the 1998/1999 year of $53.87 million, more than double last year's $25.62 million.