Fletcher set to beat rival Atkins to Aussie builder

By FIONA ROTHERHAM

Australian building products company Parbury says it would consider favourably a "fair dinkum" takeover bid of around 50Ac per share from Fletcher Challenge Building.

Fletcher Challenge yesterday confirmed market speculation it was considering a rival takeover offer for the smaller company, which is currently under a hostile bid by West Australian industrial supplies and automotive parts distributor Atkins Carlyle at 44.75c a share.

The Atkins bid has been rejected as inadequate by the Parbury board and its two major shareholders BT Funds Management (17 per cent) and the London-based Morgan Stanley Asset Management (12.3 per cent).

Fletcher Challenge Building chief executive Terry McFadgen said it was looking at the company at the invitation of the Parbury board.

"The initial indications are that there are synergy benefits available between Parbury's wood panels operation and our own that would support a valuation higher than the current bid from Atkins Carlyle."

These include Fletchers supplying more panel products to Parbury, which is a major Australian user and exporting more NZ-made panel products through Parbury's large distribution network.

Fletcher Challenge Building is no longer very active in Australia, having scaled back its loss-making construction arm to just project management.

It has said its growth into Australia is most likely to come from industry rationalisation.

Atkins Carlyle launched its unsolicited $A44 million bid last October and has lifted its 5 per cent stake to 40 per cent.

Parbury has been a mixed performer in recent years with its shares peaking above 80c in 1997 and trading below 30c for most of last year.

In the face of a potential Fletchers offer, Atkins has decided to play hard ball, telling shareholders it was not a potential seller.

Managing director Kevin Clarke said the company would not be extending its unconditional offer again when it falls due on Monday.

Parbury is hoping Fletchers will make a high enough offer to win over shareholders and avoid a long, drawn-out battle with Atkins. Arbitragers are holding an estimated 14 per cent of Parbury, awaiting the expected Fletchers counterbid.

Australian media last week speculated West Australian company Wesfi and Carter Holt Harvey were also potential bidders.

CHH this week announced a $423 million purchase of CSR's particleboard plants and medium density fibreboard facility and its sawmill to become Australia's largest panel and timber supplier.