A Dunedin engineering company facing a potential $40 million to $50 million share bid by one of the world's largest food companies says it has ''huge'' growth prospects.
Food giant JBS Australia wants to buy a 50.1% controlling stake in the 102-year-old listed company, Scott Technology.
The bid has the potential for JBS to inject a further $20 million to $50 million capital into the niche-market company after purchase costs and debt payments.
Announcing the offer yesterday, Scott management said it could secure the company's future and boost growth.
But shareholders must first decide if the $1.39 offer per share is adequate.
JBS Australia is a ''significant customer'' for Scott, which supplies its meat industry robotics.
JBS Australia describes itself as the largest meat processing company in Australia and a division of JBS, the biggest animal protein processing company in the world.
Scott chief executive Chris Hopkins said if the deal went ahead ''there would be growth right across the company; Dunedin, Christchurch, Wellington and Auckland''.
''It has huge potential for growth from such a substantial capital injection.''
The offer was a ''big endorsement'' of the company's work, he said.
The capital injection ranged between $20 million and $50 million, depending on share- holder sales volumes.
Scott employs 360 staff - 220 in New Zealand, 75 in Australia and 65 in the United States and China.
Its Dunedin operation concentrates on meat industry robotics and its Christchurch operation focuses mainly on assembly-line manufacturing.
Scott management recently stopped seeking to raise fresh capital in preference of a cornerstone shareholder.
Mr Hopkins said he was confident JBS was not buying Scott to move it and ''replicate'' it elsewhere, given the company's strength was ''the people, not its bricks and mortar''.
Scott chairman Stuart McLauchlan confirmed a board meeting in Dunedin yesterday voted unanimously to put the offer to shareholders.
''JBS love the technology. We've already automated a couple of their plants in Australia,'' he said.
He said JBS wanted Scott to remain listed, for commercial reasons.
The offer is $1.39 per share. Scott shares were trading at $1.33 at the time of yesterday's announcement, meaning it had a market capitalisation of $60.48 million. Its debt stands at $20 million.
The majority of shareholders have to vote in favour of the offer before any sale could go ahead.
Offer documents and the timetable, including the vote date, will be mailed to shareholders in coming weeks.
Craigs Investment Partners broker Peter McIntyre said the $1.39 bid offered a ''narrow'' 6c-per-share premium for shareholders to consider.
The ''big question'' was whether they thought it was enough, he said.
Mr McLauchlan said the forthcoming independent directors' report would make a recommendation on the value of the offer, and premium, to shareholders.
The offer is complicated, multifaceted and the final capital injection is dependent on shareholder uptake.
There is a $10 million share placement, separate offer to buy directly from shareholders and also a 1:8 non-renounceable rights issue to shareholders - which could total $42.5 million.
Also, there could be a further share placement to get JBS to the required 50.1% stake.
