Carter Holt directors now recommending rank offer

Carter Holt Harvey's independent directors are now unanimously recommending that shareholders accept the $3.3 billion takeover offer by Graeme Hart's Rank Group.

The company's three independent directors have previously advised shareholders to reject the $2.50 a share offer because they maintained it undervalued Carter Holt.

But Carter Holt last week cut its annual earnings forecast to $200 million, its third revision this year, and down a third on original forecasts of $300 million.

The directors then asked independent advisers Grant Samuel to reassess their valuation of Carter Holt. Based on that reassessment the directors have done an about-face and are now recommending the offer.

Yesterday, the directors asked Rank to extend the offer period of the bid, which was due to expire on Thursday.

Last night, Mr Hart conditionally agreed to extend the offer period on his bid by at least two weeks, but only if Carter Holt's independent directors unanimously recommended that shareholders accept the offer.

Mr Hart bought a 50.5 percent stake from International Paper in August, which has since increased to a 71 percent stake.

A 75 percent stake would allow Rank to undertake certain transactions without referral to other shareholders, while a 90 percent stake would enable Rank to compulsorily mop up all minority shareholdings.

Shares in Carter Holt last traded unchanged at $2.50, bang on the offer price.

- NZPA