Fish canner Connors selling out to New York firm
Connors Bros. three-month chart
Fish canner Connors Bros. Income Fund saw its unit price jump as much as 35 per cent Friday after it announced a tentative deal to sell its business to a New York private equity firm.
The units reached $8.31 for a gain of $2.15 before settling back to $8.09 at the close of trading on the Toronto Stock Exchange.
The purchase offer amounts to $8.50 a unit, near the top of Connors' 52-week trading range of $4.55 to $8.60.
The would-be buyer is Centre Partners Management LLC, founded and led by Lester Pollack, a former executive of Oppenheimer & Co. and United Brands.
The fund, with headquarters in Markham, Ont., and roots in Blacks Harbour, N.B., has plants in New Brunswick, Maine, New Jersey, Georgia, Louisiana, Puerto Rico and California. Its seafood brands include Bumble Bee, Clover Leaf, Brunswick and Sweet Sue.
Centre Partners hopes to close the deal in mid-November after getting unitholders' approval at a meeting that month.
Meanwhile, Connors has the right to shop for a better offer but if it accepts one it may have to pay the New York firm as much as $24.1 million under terms of the tentative deal.
Connors Bros. chairman Bernard Valcourt said the all-cash offer "represents an excellent opportunity for the fund's unitholders to realize a significant premium on their units" while preserving the chance of an even better price if another buyer comes along.
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