CHH shares jump 3 per cent on forest sale news

Investors today gave Carter Holt Harvey's sale of almost 95,000ha of its forest estate the thumbs up, pushing its share price up almost 3 per cent in early trading.

CHH announced the sale, for $441 million -- $27 million over book value -- to a US consortium late Friday, after the market had closed. This morning, the shares jumped 7c to $2.45 in the opening minutes of trading.

Analysts say the deal will help establish the value of the entire company, which itself may be sold after its controlling shareholder, forest products giant International Paper, said last month it was reviewing its interest.

The shares have rallied over 25 per cent since IP disclosed its plans at the end of June.

Carter Holt is selling the forests in Auckland, Coromandel, Bay of Plenty, Hawkes Bay and Canterbury -- which make up a third of its 330,000ha forest estate -- because it has struggled to generate a return on the capital invested.

In year to December 2003 it wrote down the value of its forests by $900 million to about $2 billion. Last year CHH said it would sell the forests not needed to supply its own mills.

- NZPA