China’s new beef tariffs expected to favour New Zealand exporters
Additional tariffs introduced by the Chinese Government last month on beef imports should favour New Zealand farmers and exporters.
NZ Binxi (Oamaru) Foods, a subsidiary of China’s Heilongjiang Binxi Cattle Industry Co Ltd, last December lifted to 100% its stake in North Otago meat processor Lean Meats, now called Oamaru Meats.
And Shanghai Maling’s purchase of 50% of NZ’s largest meat processor and exporter Silver Fern Farms will take effect next January.
Binxi has offered $2.20 per share for Blue Sky Meats, which trades on the Unlisted stock exchange; this is a 70% premium on Blue Sky’s recent share price of $1.30. It values the company at almost $15 million. Blue Sky shares were placed on a trading halt on November 4.
Blue Sky chairman Scott O’Donnell told shareholders in early November that the board had set out to identify a buyer, inviting interested parties to bid.
‘’Binxi… has now determined to proceed with a takeover notice,’’ O’Donnell said.
If Binxi’s offer is accepted for 90% of the shares it may, under the takeovers code, compulsorily buy the outstanding 10%. But the company has retained the right to waive that condition and buy 50.1% of the shares.
The takeover will require Overseas Investment Office approval.
Blue Sky posted an after-tax loss of nearly $2 million for its most recent trading year, ended March 2016.
O’Donnell said Blue Sky’s board had sought independent legal and financial advice on the offer.
In a review of Blue Sky in June the founder and then chairman Graham Cooney said the company’s plant was underutilised. Blue Sky had invested heavily in a new beef plant in Gore in December 2014 which has been underperforming.
Its sheep and lamb plant in Invercargill, built in 1897, was not profitable last year.
