The Takeovers Panel says it will take no further action against Southern Lamb shareholder Andrew Lowe.
Southern Lamb Investments shareholder Andrew Lowe said he didn’t breach the Takeovers Code when he bought shares in Blue Sky Meats prior to a $34.6 million takeover offer but has agreed to pay the difference in price.
While the Takeovers Panel said there is a “reasonable possibility” he may not have acted in accordance with the code, the panel and Lowe agreed to settle the matter in lieu of formal enforcement proceedings, it said in a statement.
Southern Lamb offered $3 a share for the Southland meat processor on March 18, and is owned by interests associated with Blue Sky chairman Scott O’Donnell and director Andrew Lowe.
In October last year, Lowe bought 28,312 shares in Blue Sky in three transactions on the USX market.
He paid $1.25 per share for 1750 shares on Oct 14, $1.35 per share for 9562 shares on Oct 15 and $1.35 a share for 17,000 shares on Oct 26.
All up, that’s $38,046.20, rather than the $84,936 they’d receive from the $3 offer.
According to the Takeovers Panel, at the time of Lowe’s acquisitions, interests associated with Lowe controlled approximately 18% of the voting rights in Blue Sky and interests associated with O’Donnell controlled about 17%, an aggregate of some 35%.
“If Mr Lowe was associated with Mr O’Donnell’s interests at the time of these acquisitions, these acquisitions may not have been in compliance with the Takeovers Code,” the Takeovers Panel said.
It concluded that there was a reasonable possibility there was an association between the two and “therefore, there was a reasonable possibility that Mr Lowe may not have acted in accordance with the code”.
Lowe denies this but did agree to pay the difference between what he paid and the offer price to the three shareholders, which was almost $47,000.
As a result, “subject to Mr Lowe complying with these undertakings and no additional facts coming to the panel’s attention, the panel has agreed to take no further action in relation to this matter”, it said.
Southern Lamb made the offer with 50.35% already in its pocket, having secured acceptances from Blue Sky’s second, third and fourth-largest shareholders, which gave it effective control.
The only major shareholder not on board is NZ Binxi (Oamaru) Foods, which owns 19.84%.
Binxi’s parent is China’s Heilongjiang Binxi Cattle Industry Co.
Binxi has said its intention is based on its parent company’s circumstances in China.
An independent adviser concluded the offer was unreasonable because it’s below the assessed value range for the Blue Sky shares of $3.12 to $3.67 per share.
As of April 22, Southern Lamb had received acceptances for 60.37% of Blue Sky shares.
