Twiggy Forrest could block salmon giant sale if environmental demands not met

A battle is brewing over the future of Tasmanian salmon giant Huon Aquaculture, after mining magnate Andrew “Twiggy” Forrest significantly increased his stake in the company just days after a takeover offer from Brazilian meat processing giant JBS.

Mr Forrest’s investment vehicle, Tattarang, has announced to the Australian Securities Exchange that it has increased its stake in the company to 18.51 per cent, after initially buying 7.33 per cent in June.

It makes Tattarang the second-largest shareholder in Huon behind JBS, which now holds a 40.53 per cent stake, acquired from founders Peter and Frances Bender this week under the takeover offer.

The JBS offer would require 75 per cent support from shareholders, with Tattarang’s stake now just shy of being enough to block the deal.  

Mr Forrest confirmed to the ABC he was contacting other shareholders, but would not say whether he was considering making a counter takeover offer. 

He said the document outlining the JBS takeover offer did not mention animal husbandry or the environment. 

“The environment and animal welfare should be the two top priorities of both JBS and Huon as we go forward,” he said. 

“It’s about stating to JBS and to Huon … that animal husbandry needs to be at the top of their list and we will need to be fully convinced that globally, in their massive animal-processing operations, that it is that.”

Mr Forrest said the response from JBS and Huon to Tattarang would dictate the next move. 

“We are investing to ensure that Huon goes forward under the banner of deep offshore practices — not shallow onshore practices like in Macquarie Harbour — land-based fish farming and full environmental neutrality,” he said 

“Stocking densities in pens must be humane and achieve full carbon neutrality. 

Mr Forrest, who has a PhD in marine biology, has expressed growing interest in aquaculture and already has two operations in Western Australia.

JBS new to aquaculture

Huon Aquaculture Group delivered a loss of just over $95 million in the six months to December 31 last year, citing COVID-19 as having a significant impact. 

Tattarang’s increased holding comes less than a week after JBS reached its deal with Huon to purchase the company, which is Tasmania’s second-largest salmon producer.

Sam Baker, from financial services group Shadforth, said that JBS was worth about $21 billion, had an annual revenue of $40 billion and about 80,000 employees around the globe.

The company is the world’s largest meat-packing processor and counts the Longford beef processing unit among its holdings.

JBS’s bid is subject to Foreign Investment Review Board approval and values Huon Aquaculture at about $550 million.

Taking over Huon Aquaculture would be JBS’s first foray into aquaculture.

The company has had a colourful history.

In 2017, its parent company J&F Investimentos was embroiled in a Brazilian corruption scandal when its then-chief executive Joesley Batista secretly recorded a conversation with then Brazilian president Michel Temer endorsing payments to a corrupt politician.

The recording was released as part of a plea deal to avoid a corruption investigation into Mr Batista and his brother Wesley and sparked a plunge in the Brazilian stock market. 

The company paid a fine in Brazil of 10.3 billion Brazilian reals ($2.7 billion), and a fine in the United States of $US128 million, for its role in the corruption scandals

J&F’s top executives admitted to bribing more than 1,900 Brazilian politicians to advance their business interests.

In June, the company paid the equivalent of $US11 million to a criminal gang to end a five-day cyber-attack that halted its global operations.

As well as the Longford unit, JBS previously ran the Devonport City Abattoir, which it closed in 2018, and the King Island abattoir, which ceased operations in 2012.

Huon’s founders, Peter and Frances Bender, had a controlling 53 per cent stake in the company until this week, and told the Australian Securities Exchange last week that they were in favour of the deal with JBS.

In a statement, Mr Bender said the acquisition would be “an excellent outcome” for Huon’s shareholders, partners and staff.

Multiple environmental campaigners voiced concerns about JBS acquiring Huon, fearful that the sale to a foreign company would lead to a lack of transparency around the company’s dealings.

Award-winning author Richard Flanagan, who recently published a scathing book about Tasmania’s salmon industry, has blasted the potential sale to JBS, while federal independent member for Clark Andrew Wilkie said the company was a “huge multinational corporation with a bad reputation”.

Premier Peter Gutwein said JBS had been in the state for a long time, and he was confident it would be a “responsible corporate citizen” going forward.