Cermaq not for sale - yet

The conditional offer from Marine Harvest stated: - Cermaq shareholders deciding not to carry out the Copeinca transaction - Offer to be settled with 50 per cent shares in Marine Harvest; 50 per cent cash - Requires acceptance from shareholders representing a minimum of 2/3 of the Cermaq share capital, including shares already held by Marine Harvest - Offer period to start shortly following the Marine Harvest 23 May annual general meeting - Marine Harvest has acquired 4.7 per cent of the shares of Cermaq

- In our view, no other industrial combination than Cermaq and Marine Harvest is better suited to lift both the companies and the Norwegian marine industry into a position of global leadership. We will maintain all significant parts of the companies in a strong, world class company; offering an integrated value chain from feed to retail sales. We believe a company such as this should be built not through increased exposure towards fisheries and the raw materials markets, where fish meal is being phased out as the base of marine feed. Instead, we wish to build an integrated protein company emphasizing feed, farming and value-added processing; moving away from the traditional raw materials role of Norwegian companies. Thus, we have made the offer conditional on the annual general meeting of Cermaq declining to issue the shares required to carry out the Copeinca transaction, said chairman Ole-Eirik Lerøy of Marine Harvest.

Inadequate offer In a statement from Cermaq continues process to complete Copeinca transaction and deems Marine Harvests conditional, unsolicited offer as inadequate The Cermaq Board of Directors commented: After careful consideration with the assistance of its advisors, the Board has concluded unanimously that the Marine Harvest potential conditional offer significantly undervalues Cermaq and does not reflect the synergies that Marine Harvest underlines in its press release. In its evaluation, the Board has also taken into account that the consideration is partly in the form of shares in Marine Harvest. The Board has noted that Marine Harvest sees the announcement of the Copeinca transaction as a reason for the recent relative underperformance of the Cermaq share. Assuming that this is correct, Cermaq excluding Copeinca,which is the entity that Marine Harvest potentially is bidding for, would currently have been trading above the NOK 91 level which is where it was trading at 4 April, the day immediately preceding the announcement of the Copeinca transaction. This would imply a substantial reduction in the true premium paid by Marine Harvest to achieve full control of Cermaq. The Board also points to the fact that the Cermaq share price traded above NOK 100 as recent as in March 2013. In view of all of the above, the Cermaq Board strongly urges shareholders to support the completion of the Copeinca transaction as planned. Recognising that this, based on the conditions presented, may prevent the launch by Marine Harvest of its potential offer, the Board and management of Cermaq is fully committed to take such actions as would be required to deliver value to its shareholders which are consistent with the Board’s evaluation as set out above.

No reason to continue Since the new offer from Marine Harvest did not receive support from the Board of Directors in Cermaq, Marine Harvest issued a new statement: Marine Harvest therefore sees no reason to continue these negotiations, but will nevertheless and in line with earlier notices make a voluntary offer for all outstanding shares in Cermaq, to be settled in a combination of shares and cash. Marine Harvest will offer 8.6 shares in Marine Harvest and a cash consideration of NOK 53.25 per share in Cermaq for all outstanding shares in the company. Based on the closing price of the Marine Harvest share as of 30 May 2013, the offer represents the value equivalent of NOK 107 per share in Cermaq. Adjusted for the approved dividend payment in Cermaq, the offer represents a premium of 26 per cent to the last quoted share price prior to Marine Harvest’s announcement of its intention to put forward an offer for the company. Marine Harvest thus believes the offer to represent an attractive alternative to Cermaq shareholders. Completion of the offer is conditional on Marine Harvest receiving acceptances that together with shares already held by Marine Harvest will give Marine Harvest ownership of at least 50 per cent of the shares in Cermaq on a fully diluted basis. The Board of Directors of Marine Harvest may choose to reduce this acceptance level to 33.4 per cent during the offer period. If Marine Harvest should not reach a sufficient acceptance level for its offer, Marine Harvest will release those funds now tied up in Cermaq shares. Together with capital raised prior to the offer, these funds may be made available to finance the company’s expansion in feed ; to enhance capacity in farming including potential acquisitions of financially distressed companies in Chile ; and to increase the company’s short- and long term dividend capacity. The Board of Marine Harvest sees this as an attractive alternative to pursuing the Cermaq transaction if it does not receive sufficient support for its offer for Cermaq. The offer will also include other terms and conditions in line with market practice and what has previously been announced. Marine Harvest expects to publish an offer document on 5 June 2013. The offer period is expected to commence on 5 June 2013 and expire on 19 June 2013. Settlement of the offer will be made following expiry of statutory waiting periods under applicable antitrust laws in the US and Canada and is expected to take place in July. Approval from the EU Commission will be required if Marine Harvest gains control of Cermaq. Marine Harvest is willing to settle the offer before approval from the EU Commission, although such approval is required before Marine Harvest can exercise voting rights for the shares held in Cermaq.

Over 20% of Chilean licenses Chile: If Marine Harvest ASA and Cermaq ASA agree upon a merger or an acquisition between both companies, the new firm would control over 20 percent of all the Chilean fish farming licenses.

Currently, there are close to 1,200 fish farming licenses in Chile. Marine Harvest controls around 155 of those licenses and Cermaq controls another 88 licenses. The resulting company of a merger process between these two Norwegian firms would own over 20 percent of all the local licenses for salmon.

Marine Harvest is the salmon producing company with more aquaculture licenses in Chile, followed by AquaChile (149), Multiexport (99), Los Fiordos (91) and Cermaq.

According to the financial journal Estrategia, if this merger/acquisition materializes, the transaction will require revision of the National Economic Treasurer’s Office, because the impact would not only be abroad but also at the local market. Cermaq hires additional adviser The Board of Cermaq is maintaining its conclusion that Marine Harvest’s to be launched offer significantly undervalues Cermaq. As set out in the press release this morning, the Cermaq Board is maintaining its conclusion that Marine Harvest’s to be launched offer significantly undervalues Cermaq. In light of this, Cermaq continues to evaluate its strategic options with the objective of optimising value and safeguarding the interests of its shareholders at large. As a consequence Deutsche Bank AG has been retained as financial adviser in addition to ABGSC to further assist Cermaq on these matters.

What now? Analysts have commented the potential merger between Marine Harvest and Cermaq from diffrent angels. Medias and politicians have also commented the fact that a Norwegian ”tax refugee” from Cyprus, major stock holder in Marine Harvest John Fredriksen, should becom the dominant owner of Cermaq and the dominant player at the international salmon farming scene. Nevertheless, Marine Harvest has offered the shareholders in Cermaq 8,6 shares in Marine Harvest per share in Cermaq in addition to 53,25 NOK in cash per Cermaq-share. The offer will last from 6th of June and expire the 21st of June and requires acceptance from 33,4% of the shares.