Billionaire Hart's Rank Group grabs control of CHH

Rank Group -- the investment vehicle of billionaire businessman Graeme Hart -- announced today it will launch a full takeover offer for Carter Holt Harvey.

The investment firm said it has signed a "lock-in agreement" with International Paper -- CHH's 50.5 per cent shareholder -- to purchase its stake for $2.50 per share, valuing the stake at $1.65 billion.

The lock-in agreement requires IP to accept Rank's takeover offer for its 660,843,571 ordinary shares -- which are owned by a holding company Ngahere Aotearoa.

Under New Zealand takeover rules, a company wanting to bid for a stake of over 20 per cent must make the same offer to all shareholders.

The offer is expected to be launched within four to six weeks.

Shares in CHH jumped 13c to $2.59 on the news.

IP said the offer price of $2.50 was a 30 per cent premium on the level the shares were trading at before its announcement in June that it was considering "strategic alternatives" for its stake.

The shares were trading at $1.93 on June 27 ahead of the IP announcement. Since then they have attracted the attentions of offshore hedge traders, betting the price would rise in the run up to a sale process.

IP, the world's largest paper and forest products company, is paring back its offshore interests in a bid to improve shareholder returns.

"The timing is now right for us to divest our interests," IP chairman and chief executive John Faraci said.

"CHH is a solid business with talented employees. While we remain confident in the company's leadership and strategy to grow and improve, our companies' strategies and priorities have evolved and the business climate has changed."

Mr Hart, 49, is one of New Zealand's richest men, with an estimated wealth of around $2 billion. He is a rags-to-riches success story, having left school at 17 to start a one truck cartage firm.

Much of his wealth was generated through his remarkable turnaround of Australian food group Burns Philp.

He made the local headlines last week, when his New Zealand Dairy Foods company exchanged brands with dairy giant Fonterra in $754 million deal, which netted him cash of $338 million.

CHH commercial director Maree Webster said CHH was only told of the bid at the same time the stock exchange was informed today. She said that it was primarily an issue between IP and the buyer.

"People are still digesting the news," she said.

She said chief executive Peter Springford expressed an initial positive view of the bid -- that the bidder was New Zealand owned.

CHH had not had discussion with Mr Hart or Rank Group ahead of the announcement.

Ms Webster said CHH would request an independent valuation as part of the takeover.

She said that the appreciation of the New Zealand dollar meant it was a good time for a US company to be selling New Zealand assets.

IP bought an intial 30 per cent stake in CHH in 1991 and built it up to over 50 per cent in 1995.

- NZPA