China's Binxi Cattle to mount $25.3 million takeover for Blue Sky Meats
China-based Heilongjiang Binxi Cattle Industry Co intends to make a $25.3 million takeover offer for Blue Sky Meats, the Southland-based meat processor whose shares trade on the Unlisted platform.
NZ Binxi (Oamaru) Foods, a subsidiary of the Chinese company, will offer $2.20 a share for up to 100% of the shares, Blue Sky said in a statement to Unlisted. The formal takeover offer has not yet been made but is due within 30 days of the notification of intention.
"The board of Blue Sky commenced a process during 2016 to identify a suitable buyer or buyers for Blue Sky or the Blue Sky business," the company said. "Binxi presented a proposal and has now determined to proceed with the takeover notice."
Blue Sky's shares last traded at $1.30, with one trade made this year on May 10, valuing the company at almost $15 million.
A target company statement, the board's recommendation and an independent adviser's report will be sent to shareholders, Blue Sky said.
Binxi increased its holding in North Otago-based meat processor Lean Meats, now known as Oamaru Meats, to 100% in December 2015.
Blue Sky posted a loss in the year through March and didn't pay a dividend, largely due to its Gore beef processing plant being closed for capital expansion. The plant couldn't take in a large number of cows sent for slaughter during calving due to low dairy prices, and it was later impacted by changes in stock flows for the remainder of the season.
At the time, then chairman Graham Cooney said the loss was "disappointing" and that "further capital expenditure will be necessary at both plants if Blue Sky Meats is to be the type of corporate entity that it needs to be in its community."