Friday, March 29, 2024

Blue Sky Meats takeover bid launched

Neal Wallace
Two cornerstone shareholders have launched a $3 a share takeover bid for the small Southland meat exporter, Blue Sky Meats.
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In 2016, Chinese-backed NZ Binxi (Oamaru) Foods made an unsuccessful $25.3m bid for Blue Sky Meats.

Two cornerstone shareholders have launched a $3 a share takeover bid for the small Southland meat exporter, Blue Sky Meats.

Southern Lamb Investments, an entity jointly owned by Scott and Jocelyn O’Donnell’s ODFI Ltd, and Andrew Lowe Trustee Ltd, has launched the takeover bid.

Shares in Blue Sky Meats, which now trades as Blue Sky Pastures, are listed on the Unlisted Exchange and last traded at $1.30 a share.

In the last year the shares have traded from $1.10-$1.40, giving it a market capitalisation of nearly $15 million.

The $3 a share offer is cash and will value the company at more than $34m, but is conditional on more than half of shareholders accepting the offer.

An independent committee of directors Sarah Brown and Melvin Sutton will assess the offer and make a recommendation to shareholders.

Blue Sky Meats chair Scott O’Donnell has also been the acting chief executive of Invercargill-based transport company HW Richardson Group, which has transport and infrastructure interests throughout the country.

Richardson Group owns 16.92% of Blue Sky Meats.

Andrew Lowe, of shareholder Andrew Lowe Trustee, is the managing director of Hasting’s-based Lowe Corp, which owns 17.95%.

Lowe Corp has multiple business interests from animal byproducts to property development and land holdings.

NZ Binxi (Oamaru) Foods owns 19.84% of Blue Sky Meats and Blue Star Corp, Auckland, owns 11.25%.

In 2016, Chinese-backed NZ Binxi (Oamaru) Foods made an unsuccessful $25.3m bid for Blue Sky Meats, a year after taking over the North Otago processing interests of Lean Meats.

NZ Binxi is 97% owned by the Heilongjiang Binxi Cattle Industry Ltd, Harbin in China, with the balance NZ interests.

In the financial year to June 30, 2021, Blue Sky Pastures recorded a $5.3m profit before tax ($3.8m after tax) and paid a 5c/share dividend.

Profitability grew 20% on 2020 (a 15-month year), while cashflow was positive at $10.7m.

Borrowing decreased by $6.4m and total shareholders’ equity rose 10%.

Since balance date, the company has sold its Gore plant.

In its annual report, O’Donnell said the focus was to create a product with a point of difference that appeals to affluent customers, while also improving process efficiency at its 30-year-old plant at Morton Main, north of Invercargill.

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