Rubicon lifts Tenon offer but says take it or leave it

By PAM GRAHAM

Rubicon yesterday chucked a take-it-or-leave-it extra 10c a share on the table to bolster its bid for control of its biggest investment, Tenon.

New Zealand fund managers said the increase in Rubicon's offer for Tenon to $1.95 a share was easier to accept, but they had not given undertakings.

The price is still below the $2.01 to $2.22 range Grant Samuel put on the company and Tenon's independent directors recommended that shareholders take no action pending further advice.

They had advised shareholders not to accept $1.85.

Rubicon is trying to increase its stake from 19.9 to 50.01 per cent and has the support of its shareholder Guinness Peat Group, which owns 2.17 per cent of Tenon.

If Rubicon's other major shareholder, Perry Group, accepts, Rubicon will have just over 7 per cent, because Perry has 4.99 per cent of Tenon.

"The Rubicon board has determined it will not raise this offer price beyond $1.95 per share, and it will not extend this offer beyond June 3," the company said in a letter to Tenon shareholders.

Rubicon argues that the offer provides a way of avoiding uncertainty about a second capital return from the sale of Tenon's forests and saves brokerage for small shareholders.

It released a four-page, single-spaced critique of the Grant Samuel report.

Rubicon said it was no secret that it wanted Tenon to sell its forests, but it was unhappy with the implementation of the strategy.

"Effective implementation remains the key issue for Tenon," Rubicon said.

Fund managers were mixed in their response.

"It enhances the potential for us to accept," said Nat Vallabh, of AMP Capital Investors, which owns 6.85 per cent of Tenon. AMP bought much of its stake at about $1.30 in recent months.

Brook Asset Management said it had not yet made a decision, and Alliance Capital said $1.95 was close to acceptable.

Wayne Stechman, of Tower Asset Management, said: "My initial response is that it is unlikely we will accept."

Rubicon's shares have risen from a 52-week low last month of 65c to 85c yesterday. Tenon's shares closed at $1.94.