The Winding Glass

A lot of momentum to get FPI deal done

Despite the back and forth between Tom Rideout and Loyola Hearn, there is a lot of momentum to get the FPI deal done this week; it is doubful that the impasse between the federal government and the province will derail the deal.

There is too much riding on the success of the FPI sale for it to be compromised by government authorities-- which would devolve into a tremendous blame game as to who was at fault that could last for years with a lot of detriment to the current conservative party running Canada.

I got an email today from a person close to the situation who said that despite the theatrics, there was a lot of momentum to get the deal done.

High Liner returns to Newfoundland?

Ocean Choice has just released its statement regarding an agreement in principle with FPI. OC says it is buying all the FPI plants except Burin. Burin is the secondary manufacturing plant for FPI, producing many of the items sold at Foodservice by the U.S. marketing group. The fact that Ocean Choice is not taking Burin means that it is likely going to High Liner, which FPI said has signed an agreement in principle to purchase "certain assets in Canada and the U.S." -- which presumeably means the Burin plant.

This will mark the return of High Liner to Newfoundland, following the sale to management of its Arnold Cove primary processing plant a few years ago.

The connection of Burin and the U.S. marketing group makes sense. High Liner also operates a secondary processing plants in Lunenburg Nova Scotia, and Portsmouth, NH. It has retained its secondary processing while selling off its primary processing operations. What remains to be seen is whether the company needs 3 secondary processing plants. The expansion of foodservice sales with the acquisition of the U.S. marketing division of FPI may suggest that in fact it does. In any event, I would guess that High Liner will move slowly after a final sale to determine how it may or may not consolidate its processing operations