I’m sure Tassal management and Tassal major shareholders would...

I’m sure Tassal management and Tassal major shareholders would prefer Huon asset stay in Benders hands and weaken further before they move. But they have to be thinking strategically if Huon has other suitors.

Tassal has done a great job winning local market share and diversifying which puts it in the box seat. The combined assets of the two companies produce more salmon than required for domestic volume. The combined assets whilst owned by separate companies are not scale efficient and some volume now has to be exported – ultimately, they need to be combined to compete with Norway and Chile, especially when our $ is higher.

I’m not predicting a deal is imminent, just that Tassal is most likely seriously running the number in case and the noise is keeping the shorts interested. I doubt the shorts were built on the takeover thesis but I suspect the short thesis has changed over time and waiting to see how the Huon “strategic” review plays out is now a more appealing prospect than trying to unwind on market.

We should be grateful to the shorts, they have bult a synthetic increase in the company size of 13% and yet the price remains around where they have been buying. That show of strength is not without its strategic advantages as Tassal weighs options.

Ideally no acquisition at this stage and shorts need to unwind on market. But TGR interest may not be able to wait for ideal if that risks Huon falling into strong hands.

My speculation of what’s going on behind the scenes.