Hart carrot-and-stick offer attracts takeover scrutiny

The Takeovers Panel has decided that Graeme Hart's new offer for Carter Holt Harvey might be too clever by half - the second half to be exact.

Hart launched a highly unusual two-part offer last Friday in an attempt to mop up the 4 per cent of shares he needs to take full control of the wood-products company and delist it from the stock exchange. He said he would pay $2.70 a share, but if his offer was successful within seven working days he would up the price to $2.75.

His carrot-and-stick approach had the Takeovers Panel say yesterday it was concerned the offer might not comply. "The proposed offer may not comply with the requirement ... that an offer be open for 30 days," the panel told the NZX.

Hart describes the offer as containing "an early acceptance premium".

"This provides a tangible incentive for shareholders to act quickly," he said last week.

The panel appears to be looking at the bid the other way around - as a $2.75 offer with a penalty for not accepting early.

It said putting "limiting terms" on the "the full offer price of $2.75" had the effect of shortening the offer period from 30 days to seven business days.

The panel will hold a meeting on Monday to decide the fate of the offer.

After buying a controlling stake in CHH from US giant International Paper, Hart launched his first bid for full control last September at $2.50 a share. He extended the offer all the way out to January 27 before ending up with 85.7 per cent. Once the 90 per cent level is reached, he is allowed to acquire the remaining 10 per cent on a compulsory basis.

Hart's new offer will be posted next week.