Aquaculture Sector Sees Major Opportunity

The Australian aquaculture industry is on the brink of a significant shake-up as Clean Seas Seafood Limited (ASX:CSS) considers a merger proposal from Yumbah Aquaculture Ltd. If successful, the deal would combine two leading Australian seafood producers, bringing together Clean Seas’ premium Yellowtail Kingfish operations with Yumbah’s extensive shellfish portfolio.

Clean Seas CEO Rob Gratton sees potential in the proposal. “This is a pivotal moment for our shareholders and the broader aquaculture industry,” he said. “The opportunity to merge with a well-established operator like Yumbah could create a stronger, more diversified business.”

Yumbah’s 14 cents Per Share Offer

Under the non-binding indicative proposal, Yumbah has offered Clean Seas shareholders 14 cents in cash per share, representing a 52.2 per cent premium to the company’s last closing price of 9.2 cents. Alternatively, Clean Seas shareholders can choose to receive Yumbah shares instead of cash, allowing them to maintain an equity stake in the merged business.

“The offer represents a strong premium for our shareholders,” Gratton noted. “It reflects confidence in Clean Seas’ operations and the value we’ve built in our premium seafood offering.”

Inside the Proposal: What Shareholders Should Know

The proposal is subject to several conditions, including due diligence, regulatory approvals, and a binding Scheme Implementation Deed (SID). Clean Seas has formed an independent board committee (IBC) to evaluate the deal and negotiate terms on behalf of shareholders.

“We are focused on ensuring that any transaction is in the best interests of Clean Seas investors,” Gratton said. “The IBC has determined that granting Yumbah an exclusive due diligence period is the best path forward at this stage.”

Key conditions of the proposal include:

• Regulatory clearances and no material adverse changes to Clean Seas’ business.
• Shareholder approval with no superior offers emerging.
• Termination of previous capital raising efforts, with the company shifting its focus to the Yumbah proposal.

Strategic Synergies and Market Impact

Yumbah, the largest producer of abalone in the Southern Hemisphere, operates a vertically integrated seafood business across multiple Australian states. In addition to abalone, the company produces oysters, mussels, and aquafeed, with a strong focus on sustainable farming practices.

“Combining Clean Seas’ expertise in kingfish production with Yumbah’s established shellfish operations could create a powerhouse in Australian aquaculture,” Gratton said. “Together, we have the potential to deliver an even greater range of high-quality seafood to the market.”

Next Steps: What Investors Should Expect

Clean Seas and Yumbah have entered into a Process Deed, granting Yumbah exclusive due diligence rights until 24 March 2025. During this period, Yumbah will assess Clean Seas’ financial, operational, and regulatory position to determine if it will proceed with a binding offer.

While the proposal is still subject to further negotiation, the Clean Seas board has confirmed that, at the current offer price, it intends to recommend the scheme to shareholders—provided all key conditions are met and no superior proposals emerge.

“We will keep shareholders updated as discussions progress,” Gratton assured. “This is a critical process, and we are committed to ensuring the best outcome for all stakeholders.”

For now, Clean Seas shareholders are advised to await further developments as Yumbah completes its due diligence and a potential deal takes shape.