Carter Holt says protocols agreed with IP

Carter Holt Harvey (CHH) has confirmed it had agreed a set of protocols with International Paper (IP) covering IP's "review" of its shareholding in 50.5 per cent in the forest products company.

Brokers said the market interpreted the comment as a go-ahead to break the company up.

"This led analysts to speculate there may be a break up sale on the cards for Carter Holt Harvey as opposed to a trade sale," ASB Securities broker Steve Yukovich told TV3 news last night.

On 27 June, CHH announced IP intended to explore "strategic alternatives" for the stake. IP said it would consult with the CHH board to facilitate the review process.

CHH chairman John Maasland said protocols had been agreed which were designed to facilitate a process which focused on maximising value to all shareholders.

"IP has advised that it hopes to complete the review process before the end of the year. In the meantime, it is business as usual at CHH," the statement said.

CHH shares closed down 2c at $2.46 in a weak market today.

Sharemarket analysts believe the company is worth more in parts than as a conglomerate.

Goldman Sachs JBWere recently estimated its break-up valuation at $2.81.

Two other sharebroking firms, Forsyth Barr and ABN Amro, recently lifted their break-up valuations by 21c per share (to $2.83) and 20c per share (to $2.90) respectively.

- NZPA