Olymel LP’s purchase of Big Sky Farms should be complete next week, according to the receiver looking after the sale process.
A second bid for the hog company had emerged in December to challenge Olymel’s $65.25 million offer, but Kevin Brennan, senior vice-president at Ernst and Young in Vancouver, said an auction tentatively scheduled for Jan. 8 wasn’t necessary.
“All I can say is if (the unidentified bidder) did submit a bid, it just wasn’t superior,” he said Jan. 10.
Brennan said the Olymel transaction should close Jan. 20, but procedural requirements such as document registration could hold it up a bit.
The disposal of Big Sky’s U.S. assets is proceeding under a separate transaction and should be done in February, he said.
Big Sky, based in Humboldt, Sask., was Canada’s second largest pork producer when it entered receivership in September, blaming soaring feed costs and excess hogs going to slaughter.
Documents showed Big Sky owed secured lenders Bank of Montreal, National Bank of Canada, Bank of Nova Scotia and Farm Credit Canada nearly $69 million. It also owed suppliers $8.4 million.
Brennan said selling the operation as a going concern is the best outcome for everyone.
“It will result in over 450 employees keeping their jobs and in the 14 communities in which Big Sky operates, the spinoff benefits are sizable,” he said. “It’s a very good result to have a company with deep pockets and financially very, very strong move this forward.”