You are using an older browser version. Please use a supported version for the best MSN experience.

Blue Sky Meats urges delay on takeover bid

NZN 7/12/2016 Tina Morrison

Blue Sky Meats has recommended shareholders wait for more information from the board on the future prospects of the meat processor before deciding on a takeover offer from China-based Heilongjiang Binxi Cattle Industry Co.

NZ Binxi (Oamaru) Foods, a subsidiary of the Chinese company referred to as Binxi Cattle Group, is offering $2.20 per share for the 86.5 per cent of Blue Sky that it doesn't already own.

Independent adviser Campbell MacPherson values Blue Sky's shares between $1.93 and $2.21 apiece, according to a report sent to shareholders on Wednesday.

Binxi Cattle Group built its stake in Blue Sky earlier this year, elevating it to 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.

Invercargill-based Blue Sky, which operates two meat processing plants in the South Island, posted a loss in the year through March as it was hurt by its Gore beef processing plant being closed for capital expansion.

The company is in the early stage of working on a new three-year strategic plan to achieve significant operational efficiencies and business improvements.

Blue Sky's board recommended in a letter to shareholders that they take no action on the offer to allow the board and management further time to work on its strategic plan, which will enable it to be better placed to offer guidance on Binxi's offer.

It said it would provide advice to shareholders in mid-January, before Binxi's offer closes at the end of that month.

Blue Sky shares last traded at $1.30 on the Unlisted platform, valuing the company at $15 million.

image beaconimage beaconimage beacon