Carter Holt float delayed - Bunnings owner tipped to bid

Bunnings. Photo / file

Building products firm Carter Holt Harvey has confirmed that its sharemarket listing plans have been put on hold.

The announcement comes amid speculation that ASX-listed Wesfarmers, the operator of the Bunnings Warehouse DIY chain in New Zealand, is preparing a bid for Carter Holt's Carters building supplies stores in this country.

In a statement the company said recent market conditions had made the earnings outlook for its Woodproducts Australia business uncertain.

"The new [Carter Holt] board, in conjunction with the group's advisors, determined they were unable to finalise the forecasts in the IPO offer document given the necessary level of confidence required as to the forecasts' accuracy and probability of being achieved," the company said.

"Accordingly, until these circumstances become clearer, the IPO of CHH has been put on hold."

Carter Holt chief executive Prafull Kesha said the decision had the full support the firm's owner, Rank Group, which is owned by New Zealand billionaire Graeme Hart.

"While we were excited about the prospect of an IPO, it is the right decision in the circumstances to exercise caution and pause," Kesha said.

Local fund managers have expressed concern about the growth outlook for Carter Holt and whether any prospectus forecasts put forward would be reliable.

The poor post-listing performance of Australasian food giant Goodman Fielder, which Rank floated in 2005, has been lurking in the background.

Auckland-based Carter Holt was expected to register a prospectus for the IPO this month, with the float - likely to be the biggest New Zealand will see this year - pencilled in for July.

The Australian Financial Review reports that the float, expected to value the firm at up to $1 billion, has been pushed back until after the August reporting season and may not take place until the December quarter.

Meanwhile, the Australian newspaper has reported that Wesfarmers is considering acquiring the Carters stores for Bunnings Warehouse.

In addition to its Woodproducts New Zealand business, Carter Holt operates around 50 Carters building supplies stores in New Zealand.

The newspaper suggested the negotiations with Wesfarmers had led to the float plans had being put on hold.

The sharemarket listing would still go ahead if a sale to Wesfarmers failed to eventuate, the report said. The Business Herald is seeking comment from Rank.

Wesfarmers spokeswoman Cathy Bolt said the company did not comment on speculation about mergers and acquisition activity.

Carter Holt, which Rank acquired for $3.3 billion in 2006, is understood to have revenue of about A$2 billion and roughly 5000 staff.

The float is being jointly managed by investment banks Credit Suisse, First NZ Capital, Forsyth Barr, Deutsche Craigs and Deutsche Bank.