Clean Seas Seafood Limited announces proposal from Yumbah and grants exclusive due diligence

19 Feb 2025 01:13 CET

19 February 2025


Clean Seas Seafood Limited (“Clean Seas”, ASX: CSS, “the Company”) advises that
it has received a non-binding, indicative and incomplete proposal from Yumbah
Aquaculture Ltd (“Yumbah”) to merge with CSS through the acquisition of 100% of
CSS shares by way of a scheme of arrangement (“Scheme”) offering $0.14 cash per
share with a scrip alternative in Yumbah (“Proposal”).

About Yumbah
Yumbah is an Australian-owned vertically integrated investment grade shellfish
aquaculture portfolio with operations in South Australia, Victoria, Tasmania and
New South Wales. The company delivers premium produce from spat through to
harvested products, supplying farmers, wholesalers and retailers with
sustainably farmed shellfish.
Yumbah is the largest producer of abalone in the Southern Hemisphere,
specialising in onshore production of this prized shellfish. In addition, the
Group produces oysters, mussels, aquafeed and oyster spat. For more information,
visit: www.yumbah.com

Anthony Hall is a director and the largest shareholder of Yumbah with a ~53.6%1
ownership and is Clean Seas’ largest shareholder with a current ownership of
~22.6%. CSS director Gary Higgins also serves as a director and Chairman of
Yumbah.

Details of the Proposal
Under the terms of the Proposal, CSS shareholders will, as the default
consideration, receive total cash consideration of
$0.14 per share (“Cash Consideration”). As an alternative to the Cash
Consideration, eligible CSS shareholders may elect to receive Yumbah scrip. CSS
shareholders who elect to receive scrip will have ongoing economic exposure to
the merged Clean Seas and Yumbah business. The exact CSS to Yumbah share ratio
(for the scrip alternative) will be determined at a later stage, subject to the
relative value of Yumbah scrip.
The Proposal’s Cash Consideration of $0.14 per share represents a premium of:
• 52.2% to the closing price of $0.092 on 18 February 2025 (being the last
trading day prior to this announcement);
• 46.8% to the one month volume weighted average price (“VWAP”) to 18 February
2025 of $0.0954; and
• 27.6% to the 3 month VWAP to 18 February 2025 of $0.1097.

The Board of CSS has established an independent committee of directors (“IBC”)
to evaluate and negotiate the terms of
the Proposal.2
The Proposal is subject to a number of conditions including:
• mutual satisfactory due diligence;
• unanimous recommendation from the IBC and a commitment from all Clean Seas
Directors to vote any shares that they hold or control in favour of, or accept
into, the Yumbah Proposal, in the absence of a superior proposal and subject to
an independent expert concluding that the transaction is in the best interests
of CSS shareholders; and

• entry into a Scheme Implementation Deed (“SID”) on customary market terms
acceptable to CSS and Yumbah,
including:
o standard conditions precedent including regulatory clearances, no material
adverse change, no prescribed occurrences, no regulated events, no material
acquisitions/disposals, no dividends/distributions, shareholder and court
approval and subject to any matters arising out of due diligence;
o provisions dealing with vesting or termination of Clean Seas performance
rights;
o standard deal protection mechanisms (including a break fee consistent with
Takeovers Panel guidance), no- shop, no-talk, no-due diligence, notification and
matching right provisions;
o standard termination provisions for material breach; and
o customary representations and warranties.

The Proposal will be funded through a combination of debt and, to the extent
eligible CSS shareholders elect to take Yumbah scrip consideration, Yumbah
equity.
The proposed consideration under the Proposal would be reduced by the value of
any dividends or other distributions
declared, proposed or paid on and from today’s date.

The IBC’s Intention
Following careful consideration, the IBC has determined that it is in the best
interests of CSS shareholders to progress the Proposal and allow Yumbah to
undertake further due diligence.
Subject to Clean Seas and Yumbah agreeing to a SID on terms acceptable to Clean
Seas, the IBC unanimously intends to recommend that CSS shareholders vote in
favour of the proposed Scheme (at the current offer price of $0.14 per share)
and each director intends to vote any CSS shares they control in favour of the
Scheme, subject to:
• the parties entering into a binding SID on terms no less favourable (when
taken overall) to CSS’ shareholders than
the Proposal;
• no superior proposal being received; and
• an independent expert concluding (and continuing to conclude) that the
Proposal is in the best interests of CSS shareholders.

Further to the Company’s announcement on 20 December 2024 detailing the events
surrounding the Year Class 24 cohort of fish and the appointment of Morgans
Financial and Bell Potter Securities (“JLMs”) to assist the Company in
determining a capital strategy, the IBC has resolved to pursue the Proposal on
an exclusive basis and terminate the appointment of the JLMs and all other
discussions in relation to raising capital.
Yumbah has indicated that the offer price of $0.14 per share follows and
reflects an initial period of financial, operational and technical due
diligence, including in relation to CSS assumptions regarding harvest yield
percentages. Yumbah now intends to undertake customary due diligence in the next
stage, including in relation to legal, regulatory, workplace and taxation
matters.

Next steps
CSS and Yumbah have entered into a Process Deed under which Yumbah has been
granted until 24 March 2025 to undertake exclusive due diligence and
negotiations on a binding SID. The Process Deed contains customary deal
protection mechanisms, fiduciary exclusions and a matching right for Yumbah in
the event of a competing proposal. A copy of the Process Deed is attached to
this announcement.

CSS shareholders do not need to take any action in relation to the Proposal. The
IBC will continue to keep shareholders and the market informed of developments.

The IBC notes that there is no certainty that the engagement between CSS and
Yumbah will result in a change of control transaction or an offer capable of
acceptance by CSS shareholders.

This announcement does not constitute a proposal to make a takeover bid for the
purposes of section 631 of the Corporations Act.


CSS has appointed Candour Advisory as financial advisor and HWLE as legal
advisor. Yumbah has appointed K&L Gates as legal advisor.


The Full announcement including the Process Deed is attached as a pdf.



1 As per Yumbah’s Annual Report for the financial year ended 30 June 2024.
2 The IBC consists of Katelyn Adams and Marcus Stehr. Note that CSS director,
Gary Higgins who is also a director and Chairman of Yumbah, is not part of the
IBC.

This announcement is authorised by the IBC of the Company.
For further information on Clean Seas Seafood, please contact:

Rob Gratton
CEO
rob.gratton@cleanseas.com.au

+61 434 148 979


About Clean Seas Seafood

Clean Seas Seafood is a fully integrated Australian Aquaculture business listed
on the Australian Securities Exchange (ASX) and with a secondary listing on
Euronext Growth Oslo (OSE).
Clean Seas is the global leader in full cycle breeding, farming, processing and
marketing of its Hiramasa or Yellowtail Kingfish (Seriola lalandi) and is
renowned amongst leading chefs and restaurants around the world for its
exceptional quality.
Clean Seas is recognised for innovation in its sustainable Yellowtail Kingfish
farming and has become the largest producer of aquaculture Yellowtail Kingfish
outside Japan. For more information, visit www.cleanseas.com.au

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639107_ASX Announcement - Yumbah Proposal & PID.pdf