Oceana eyes Lusitania

Late last month Oceana, SA's largest fishing group, with a market value of over R5bn, issued a cautionary notice warning shareholders that talks were under way that could have a material effect on its share price.

Talk around the docks is that Oceana is eyeing unlisted Lusitania Fishing, a diversified fishing company with strong positions in the south coast lobster and hake segments.

The deal would make a good fit for Oceana, which at present catches mainly west coast lobster and holds only a small hake operation.

South coast lobster sales have shown a marked improvement lately, as evidenced in the recent results of Sekunjalo Investments subsidiary Premier Fishing. The weaker rand-dollar exchange rate should also help revenues and profits, as the bulk of south coast lobster is exported.

Fishing industry sources in Cape Town say the big question is whether Oceana intends buying out all of Lusitania or only selected operations.

Lusitania is one of the best-known fishing companies in Cape Town. It was started in the 1940s by the Fernandes family.

It's difficult to place a value on an unlisted enterprise, but Oceana has a balance sheet able to accommodate a sizeable acquisition. At the end of September, the company held net cash of over R380m.

Commenting on the results for the year to end September, Oceana CEO Francois Kuttel indicated that the company was seeking further organic and acquisitive growth.

But Lusitania is not the only possible target being punted. Initial speculation was that Oceana was looking to acquire Foodcorp's fishing arm, Marine Products, for R600m.

In September Foodcorp announced the sale of that division, but declined to identify the buyer until all the conditions of the deal were met.

There would be considerable overlap in the operations of Oceana and Marine Products. Both are involved in the west coast lobster industry as well as in pilchards, horse mackerel and anchovy.

Source: Financial Mail