CHH board backs $2.75 bid by Hart

Billionaire Graeme Hart yesterday edged closer to full control of Carter Holt Harvey after the forestry giant's independent directors recommended his $2.75 a share takeover bid.

Chairman John Maasland and fellow independent director Mark Burrows said Hart's revised offer fell within the $2.43 to $2.89 a share valuation provided in the latest independent appraisal report.

This compares with a valuation of $2.43 to $2.90 assessment made when Hart launched his first bid of $2.50, which closed last month.

The directors gave no further comment, saying only the offer and the appraisal report by corporate advisers Grant Samuel would be sent to shareholders shortly.

CHH's shares last night fell 1c to $2.73 amid expectations that Hart's offer would succeed.

Tyndall Investment Management's Rickey Ward said those who held shares in CHH fell into two camps - hedge funds looking for a quick gain and those betting on Hart turning the company around.

The outcome of the bid, which values CHH at $3.63 billion, will depend on the relative weighting on the share register.

"It is going to be close," Ward said.

The Takeovers Panel this week forced Hart to reverse an earlier plan to pay the $2.75 only if he lifted his CHH interest from his present 85.7 per cent to 90 per cent within seven days of making the offer.

After the seven days, he planned to only pay $2.70 a share and only if he got to 90 per cent - the threshold at which he compulsorily can acquire all shares.

The panel said the bid did not comply with takeover rules because it shortened the offer period below the minimum 30 days.

The $2.75 a share bid values the remaining 14.3 per cent he does not own at $514 million. This is just $46 million more than he was paying for the stake under the $2.50 a share offer he closed last month.

Hart wants full control to take CHH out of the public eye, giving him greater flexibility to restructure the forestry group.

He is also likely to load CHH with debt that is at present carried by his private company Rank.

The new bid is subject to a non-waivable condition to take Hart's holding to 90 per cent.