The Huon Aquaculture Group Ltd (ASX: HUO) share price regained momentum on Monday afternoon. Shares in the Aussie salmon farmer finished the day at $3.83, up 6.7%.
Investors are making a grab for Huon shares after the company released an update this afternoon. The contents of the release relate to the approvals needed for the proposed buyout by Brazil-based meat processor, JBS SA.
Here's what we know following the update.
Another hurdle cleared
While the takeover of Huon by JBS is not new, the details of its progression are. According to the release, JBS' takeover offer of $3.85 cash per Huon share has received approval from the Foreign Investment Review Board (FIRB).
This means the Commonwealth has made no objections to the Australian company being bought out by the foreign company, JBS. Shareholders are clearly excited, reflected in the higher Huon share price today.
The Huon board is now left to deliberate whether it will pay a special dividend worth 12.5 cents per share. This would allow shareholders to enjoy a further 5 cents per share in franking credits.
Additionally, the company disclosed that no further bids were received after the JBS schemes were announced on 6 August 2021.
Management commentary
Commenting on the FIRB approval, Huon chair Neil Kearney said:
The FIRB decision is another important step in securing the future of Huon, our 800-plus employees and the hundreds of Tasmanian businesses that work with our company. In addition to its commitment to invest in the business and our people, JBS has committed to maintaining our world-leading farming practices to support long-term sustainable growth.
Huon has established the highest standards of animal husbandry, biosecurity, environmental management, and sustainable farming practices and JBS will continue this uncompromising approach. Importantly, JBS also has the proven skills and expertise to access new international markets for Huon's premium products.
What's next for the Huon share price?
The Huon annual general meeting (AGM) and scheme meetings will be held on 29 October. If shareholders approve the scheme, the company expects Huon shares will be suspended from trading at market close on 3 November.
The Huon share price has returned 38.9% to its shareholders over the past year. At its current share price, Huon trades on a price-to-earnings (P/E) ratio of 43.9 times.
