Forestry investors advised to wait on takeover offer

By PAM GRAHAM

Do not sell now if you are a long-term investor in forestry.

That is the advice from Perpetual Trustees to Opio Forestry Fund investors considering an 85c-a-unit - or $12.7 million - offer to take over the Otago and Southland forestry owner.

Perpetual said unitholders wanting cash before trees were harvested could find the offer from City Forests - a trading arm of the Dunedin City Council - hard to match.

"However, for unitholders who have invested in the fund for the long term, and who are prepared to wait for their investment to mature in the period 2008-2013, the trustee recommends that you do not accept."

The takeover offer is conditional on acceptances from 75 per cent of unitholders. Perpetual said it was willing to discuss commercial arrangements with City Forests that might benefit Opio unitholders.

Opio owns 1360ha of mainly radiata pine forests in South Otago and Southland, some of which are adjacent to City Forests' estate.

Opio is valued at 93.4c-a-unit by Fraser Chandler Keating - above the 85c bid price but below the $1.02 valuation in Opio's last annual report.

The latest valuation uses estimates of log prices, shipping rates and currencies over the five-year harvest, rather than current prices.