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$5.22 tassal group limited

Why would you short Tassals now?, page-734

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28/07/21

07:17

Post #: 54824189
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Originally posted by rustynailz: ↑

Don't be too concerned as transaction agreements have clauses in them to protect earn out agreements regarding transfer pricing arrangements between entities etc.

Once those rights have been extinguished, the new margins is likely one as a result of tax minimization, cost structuring and likely inter-entity service agreement rates.

I suspect that De Costi likely only gets paid for processing the fish, with the downstream supply arrangements and economic entitlements now flow to Tassal directly.

I believe they overpaid for the actual assets they bought, but when you consider the alternative, it was still likely a cheaper, faster and more efficient option to opening up and developing that side of the business. There are some unmeasured intangible assets that they essentially bought too, which doesn't show up on the balance sheet or profit & loss statement.

Needless to say the prawn expansion wouldn't be occurring if it wasn't for the De Costi acquisition.

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Thanks, that eases some of my concerns

TGR Price at posting: $3.36 Sentiment: Buy Disclosure: Held
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