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British tycoon backs disgruntled Scottish Salmon Company shareholders

Minority shareholders remain concerned about being squeezed out in the Bakkafrost deal.

Scottish Salmon Company shareholder criticizes terms of Bakkafrost offer

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Another minority shareholder sells Scottish Salmon Company stake to Bakkafrost

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Scottish Salmon Company shareholder fighting Bakkafrost takeover

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Private equity fund Northern Link is supporting all minority shareholders of the Scottish Salmon Company (SSC) in its sale to the Faroe Islands-based salmon farmer Bakkafrost, business tycoon Yuriy Lopatynskyy told IntraFish.

"Northern Link supports the equal treatment of all SSC minority shareholders," Lopatynskyy said. "The offer does not provide SSC minority shareholders with the same or economically similar terms as received by Northern Link in its original sale."

The statement comes in response to a recent IntraFish article reporting that one of SSC's minority shareholders, Arild Johansen, is seeking the same terms as Northern Link for the acquisition of his shareholding.

SSC directors are also yet to make an official statement on their views of the Bakkafrost mandatory terms, Lopatynskyy said.

Northern Link agreed to sells its 68.6 percent stake in SSC on Sept. 25 to Bakkafrost for NOK 28.25 (€2.80/$3.10) per share in a deal worth £517 million (€604 million/$670 million).

A third of the consideration was paid in 2,256,470 Bakkafrost shares issued at a price of NOK 500 (€49.50/$54.80) per share. The rest of the transaction was settled in cash.

Following the deal, Northern Link is now the fourth-largest shareholder in Bakkafrost.

At the time of the announcement, the private equity firm agreed not to buy or sell any derivative instruments based on its Bakkafrost shares for six months, a move that restricted buying put options or call options to hedge Northern Link's investment in Bakkafrost, Lopatynskyy noted.

However, that did not prevent Bakkafrost shares from spiking at the news, which is where Johansen and other shareholders feel the imbalance lies.

"The purchase price for a controlling stake in SSC was so attractively valued for Bakkafrost that their shares shot up in price in subsequent trading on the Oslo Bors even after such a highly dilutive private placement was made at a substantial discount to market price," Johansen said.

Usually, companies acquiring another company see the opposite effect, with share prices taking a downturn for a period after the announcement.

Bakkafrost announced to minority shareholders that the final offer price for SSC common shares will be NOK 28.25 (€2.80/$3.10), the highest price the stock has been trading at during the past five years.

Bakkafrost currently holds 80.8 percent of all SSC common shares. Under Norwegian law, if ownership reaches 90 percent, shareholders of the remaining 10 percent will be left with no choice but to sell. Beyond Jonansen and investor Edward Smythe its unclear which remaining shareholders have not sold out to Bakkafrost.

Who is Yuriy Lopatynskyy?

Northern Link is a wholly-owned subsidiary of the Virgin Islands-based Sopica Global Retail Growth Fund, which is advised by Luxembourg-based LLF Financial, led by Edinburgh-based tycoon Yuriy Lopatynskyy.

Lopatynskyy is linked to several investments and properties, including some cited in the Paradise Papers including Uraslib Russia Select Fund,, USB Asset Management, Sopica CIS Small Cap Fund, FMIG and BAMI First Mercantile.

Lopatynskyy took a controlling interest in Scottish salmon farmer Lighthouse Caledonia in 2009 through his private equity firm Northern Link, right before it was acquired by SSC.

The £17 million (€20 million/$22 million) transaction was supposed to lift the salmon farmer's position and create more than 200 jobs in Scotland, after it had suffered a cash flow crisis in 2008 and laid off more than 100 employees.

Northern Link has held in the past several other investments in aquaculture and marine-related companies in Norway, Peru and Russia, including stakes in Leroy Seafood, Codfarmers, Marine Farms, Copeinca and Villa Organic.

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