Carter Holt keeps Tenon options open

By ANDREW MacDONALD

Carter Holt Harvey continues to eye Tenon's assets and is not clearly ruling out a bid for the company.

Carter Holt spokeswoman Bridget Beaurepair said the company had long been interested in Tenon's structural assets.

"If and when we have anything to advise, we will do it in the appropriate manner and at the appropriate time."

Carter Holt has money to spend after selling its Tissue unit to Svenska Cellulosa for $1 billion. It releases its first-quarter results next Wednesday.

Last Thursday, Rubicon made a $1.85 a share bid to raise its near-20 per cent cornerstone stake in Tenon, the former Fletcher Challenge Forests, to 50.01 per cent.

Market watchers were expecting a counter-bidder for Tenon to emerge, said Macquarie Equities investment director Arthur Lim.

Fletcher Building chief financial officer Bill Roest has ruled out a counter-bid.

Lim said: "From the market's perspective ... the counter-bidder is likely to be somebody like Carter Holt Harvey who can expect a lot of synergies from owning it."

He said it would be difficult for any company to duplicate Tenon's structural assets, which included sawmilling plants, plywood plants, moulding plants and the like.

"[Carter Holt] can effectively use [Tenon] as a vehicle for consolidating their solid-wood processing in the North Island, and also it adds some very attractive added-value wood processing operations to their forest estates," Lim said.

Last month, Carter Holt chief Peter Springford also expressed interest in packaging businesses in Australia and New Zealand.

ASB Securities broker Stephen Wright said it was possible Rubicon was trying to flush out other potential buyers for Tenon with its bid.

Yesterday, brokers spoken to by NZPA said a takeover bid near the $2 mark was likely to be more successful.

Rubicon shares closed down 1c at 87c, Tenon was up 2c at $1.93, and Carter Holt was up 2c at $2.27.

Meanwhile, Rubicon's estranged shareholders, Guinness Peat Group and Perry Corp, are both doing nicely out of a run-up in Rubicon's share price.

The shares have risen 13c in the past month, implying a $7 million paper gain on each of their near-20 per cent shareholdings.

GPG has said it will accept Rubicon's $1.85 bid for the 2.17 per cent of Tenon shares it owns. Perry is also believed to be a shareholder in Tenon, but with less than 5 per cent.

GPG took Perry to every court in the land to argue that it had not properly disclosed its shareholding in Rubicon. It also went to regulators to complain about the pay schemes for Rubicon chief executive Luke Moriarty.

Rubicon director Terry Gibbs has now become a public advocate of Rubicon's bid for Tenon.

"We're supportive because it is the right thing for Rubicon to do," he said. "It is a simple business reaction."

- NZPA and additional reporting by Pam Graham