Salmon bidding war leaves sour taste

A salmon jumps for food pellets thrown by a Chilean worker into a tank anchored at the Pacific port of Chacabuco, some 1,800 kilometers south of Santiago, September 16, 2003.

LONDON, Aug 27 (Reuters Breakingviews) - Investors hoping for a tasty bidding war over Oslo-listed fish farmer Norway Royal Salmon (NORY.OL) have been left empty-handed. Bigger rival SalMar (SALM.OL) said last week it intended to snap up NRS for 270 Norwegian crowns a share, valuing the company at $1.3 billion. The stock leapt as high as 277 crowns, suggesting potential for an even higher counterbid read more . But shareholders who bought at the peak are nursing a 13% loss after a majority of investors plumped instead for rival NTS’s (NTSA.OL) 240 crown bid.

NTS’s chunky holding effectively blocked SalMar’s offer, causing other shareholders to blink. However, it’s unlikely to be the only M&A battle coming downstream. Tough regulations and tricky biological challenges make opening new fish farms hard, meaning any increases in demand – for example through the reopening of restaurants – is likely to push up prices, and thus farmers’ profits. Handelsbanken analysts raised their price forecasts for the fish in July, and now predict almost 9% growth through 2023. M&A remains the simplest way of landing a whopper. (By Oliver Taslic)

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Editing by Ed Cropley and Karen Kwok

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