Blue Sky turning Chinese too?

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.