Waiting game for Hart on CHH bid

Rank group counsel Andrew Harmos (left) and Greg Horton arrive for the Takeovers Panel Hearing at the Auckland Airport. Picture / Martin Sykes

The future of billionaire Graeme Hart's latest offer for forestry giant Carter Holt Harvey was in the balance last night as officials deliberated on whether the bid met takeover rules.

The Takeovers Panel convened at Auckland Airport yesterday afternoon but was not expected to announce a decision until today or tomorrow.

The panel says Hart's offer may breach requirements that it remain open for the required minimum of 30 days.

Hart has offered to pay investors $2.75 a share if he is able to lift his holding in the company from 85.7 per cent to 90 per cent within seven days of making the offer.

The bid, which values CHH's shares at $3.6 billion, tops an earlier $2.50 a share offer.

If the Hart stake gets to 90 per cent - the threshold at which he can compulsorily acquire the outstanding shares - after the seven-day period, he will only pay investors $2.70.

If he fails to reach the threshold at all, he may withdraw.

In its notice of the meeting, the panel said: "The limited terms of the proposed offer in respect of the full price may have the effect of shortening the offer period for the offer at $2.75 from 30 days as required by ... the code, to seven business days."

Yesterday's meeting of the panel, chaired by John King, was closed to the public, but Andrew Harmos and Greg Horton, lawyers for Hart's Rank Group, were expected to argue that the offer was clearly open for the minimum period.

The weight of legal opinion, however, appeared to be backing the panel.

Simpson Grierson partner Carl Rowling said: "When the panel issues a notice that is fundamentally a question of interpretation as opposed to fact-gathering, the prospect of successfully arguing against the panel's initial view is much reduced."

Hart is expected to reformulate his offer if the panel rejects his view that it complies with the Takeovers Code.