Salmon producers caught in feeding frenzy

A salmon with a label attached is seen at the Cargill research centre in Dirdal, Norway, August 1, 2018.

LONDON, Aug 20 (Reuters Breakingviews) - Appetite for salmon producers is turning into a feeding frenzy. Just a week after Brazilian meat giant JBS’s (JBSS3.SA) $314 million bid for Australia’s Huon Aquaculture (HUO.AX), Oslo-listed SalMar (SALM.OL) on Friday placed an order for local rival Norway Royal Salmon (NORY.OL). Its 11.8 billion Norwegian crown ($1.3 billion) approach edges out earlier interest from NTS (NTSA.OL), another Norwegian fish specialist.

The chunky premiums to undisturbed prices – 54% in the case of Norway Royal and 61% for Huon – is testament to salmon’s resilience. Despite Covid-19 shuttering big customers like restaurants last year, $8 billion SalMar said punters wanting home-cooked delicacies made up the shortfall. Growing concerns about the carbon footprint of beef only add to attractiveness. Like SalMar, rivals Leroy Seafood (LSG.OL) and Bakkafrost (BAKKA.OL) are trading over 10% above pre-coronavirus levels. With Norway Royal shares trading 3% higher than SalMar’s offer, investors are clearly hoping bidders will come back for another bite. (By Oliver Taslic)

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Editing by Ed Cropley and Karen Kwok

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