Third Avenue increases Rubicon stake

New York fund manager Third Avenue has lifted its stake in investment group Rubicon for the second time in just over a month.

The latest deal saw the fund manager spend about $2 million to take its stake to just over 11 per cent.

It is not clear why Third Avenue is interested in the company, which emerged from the ashes of the former Fletcher Challenge group. But speculation has centred on the potential for wood processor Tenon, formerly Fletcher Forests, of which Rubicon owns 51 per cent.

Third Avenue's play means that four parties own 60 per cent of Rubicon's 279 million shares.

US investor Perry Corp owns 19.8 per cent, Sir Ron Brierley's Guinness Peat Group 19.9 per cent and AMP 10 per cent. AMP is building a stake in Tenon.

Third Avenue has become a significant Rubicon shareholder in the past year.

The fund manager said Tenon was regarded as undervalued, particularly in US dollar terms. If the Kiwi dollar fell, as many expect, Tenon's value would soar.

Rubicon was not seen as a long-term holder of assets but as a trader.

Third Avenue is also a 10 per cent shareholder in Tranz Rail.