Hart reaches 71pc stake in Carter Holt Harvey

Graeme Hart

WELLINGTON - Billionaire businessman Graeme Hart has increased his stake in Carter Holt Harvey to 71 per cent, and given the first indication he is willing to play hard ball for control of the iconic forest products company.

Rank Group, controlled by Mr Hart - the country's richest man - filed a substantial security notice to the Stock Exchange this morning saying it now holds 71 per cent of the company, from 68.7 per cent.

Last night, Mr Hart conditionally agreed to extend the offer period on his $3.3 billion bid by at least two weeks. But there's a big catch: Carter Holt's independent directors must first unanimously recommend that shareholders accept the $2.50 a share offer.

The company's three independent directors have maintained throughout the takeover process that the offer should be rejected because it undervalues Carter Holt.

They had requested an extension to the offer, due to expire on Thursday, to allow shareholders more time to consider a new valuation report which reassesses Carter Holt's worth in light of last week's earnings downgrade.

The report, by valuers Grant Samuel, is expected later today.

Carter Holt last week cut its annual earnings forecast to $200 million, its third revision this year, and down a third on original forecasts of $300 million.

Mr Hart bought a 50.5 per cent stake from International Paper in August. He has so far given little indication of his target holding, but last night's manoeuvre suggests he may want to walk away with the entire company.

A 75 per cent stake would allow him to undertake certain transactions without referral to other shareholders, while a 90 per cent stake would allow him to compulsorily mop up all minority shareholdings.

Shares in Carter Holt last traded unchanged at $2.50, bang on the offer price.

- NZPA