NZ Binxi won't budge on $2.20 takeover price for Blue Sky
NZ Binxi (Oamaru) Foods, a subsidiary of China-based Heilongjiang Binxi Cattle Industry Co, won't budge on its $2.20 per share takeover price for Invercargill meat processor Blue Sky Meats.
Last week, Blue Sky's directors told shareholders they want NZ Binxi to lift its offer by 30 cents per share before they'll recommend it after a strategic review outlined what the meat processor needs to do to drive profit growth. The offer for 86.5 percent of Blue Sky that NZ Binxi doesn't own closes on Feb. 18 and was at the top end of independent adviser Campbell MacPherson's $1.93 and $2.21 valuation range. It said it won't increase its current bid and has told Blue Sky's directors.
"NZ Binxi has received a good volume of acceptances for its offer for Blue Sky Meats to date but would need to see acceptances continuing to flow if the offer is to succeed," it said in a statement. "We have fully considered all aspects of the business, the competitive environment, historical and current financial results, overseas market conditions and future capital required to operate the improved business performance."
Binxi Cattle Group built its stake in Blue Sky last year, becoming the third-largest shareholder behind Lowe Corp and HW Richardson Group. It operates a vertically integrated beef business in China, owns New Zealand meat processor Lean Meats Oamaru and wants to acquire Blue Sky to grow its New Zealand Binxi business.
The offer is conditional on it receiving acceptances for at least 90 percent of Blue Sky shares, which will enable it to compulsorily acquire all of the remaining shares. It can waive that condition, but can't declare the offer unconditional unless it receives acceptance taking its holding to more than 50 percent. The offer is also conditional on the Chinese company obtaining consent from New Zealand's Overseas Investment Office.
Blue Sky shares last traded at $1.30 on the Unlisted platform, valuing the company at $15 million.