NZ Binxi builds 20% stake in Blue Sky Meats, may revisit takeover after getting OIO signoff

Thursday 1st June 2017

China's Heilongjiang Binxi Cattle Industry Co won't rule out revisiting its takeover of Invercargill meat processor Blue Sky Meats now that the deal has Overseas Investment Office approval, having abandoned the bid in March when the OIO process missed a deadline.

"We don't have any fixed position on what our next steps will be," Richard Thorp, chief operating officer of Binxi Cattle's local unit NZ Binxi (Oamaru) Foods, told BusinessDesk after the OIO gave the deal a greenlight this week.

Binxi backed out of the $25.4 million takeover bid in March when it missed a March 20 deadline to get regulatory sign-off. "We had no OIO approval, so we couldn't proceed," said Thorp. He added that there were also some conditions in the bid that were below expectations and "it has been a very difficult year in the South Island."

In March, Blue Sky chairman Scott O'Donnell told shareholders wet and cold weather triggered a material adverse change that will lead to significant poorer than expected financial performance in the 2017 financial year. "This decline in financial performance means that the material adverse change condition was not satisfied," he said at the time.

This week O'Donnell told BusinessDesk he believes the OIO was simply publicly releasing its decision and he was "not aware of any other takeover decisions."

Thorp said, however, it is "important for us as a business to know it (the OIO approval) is in place. We appreciate that approval." Binxi currently has a 20 percent stake in the company after lifting its shareholding in recent weeks, he said.

"In our business strategy we are very happy to be at the level we are at. We have the OIO approval now. We need to be clear about our way forward and whatever we do, we will do with good and clear communication with the board at Blue Sky," he said.

Binxi Cattle Group began building a stake in Blue Sky last year. It operates a vertically integrated beef business in China, owns New Zealand meat processor Lean Meats Oamaru and planned to acquire Blue Sky to grow its New Zealand Binxi business. Thorp said the company is not looking at any other New Zealand assets.

Blue Sky shares are listed on the Unlisted platform and last traded at $1.85.

(BusinessDesk)

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