Rubicon warns of biotech fallout

By PAM GRAHAM

Rubicon says it could be forced out of its ArborGen biotechnology joint venture if Guinness Peat Group succeeds in taking control of the company.

But GPG director Tony Gibbs says the suggestion is nonsense.

ArborGen, owned by Rubicon, International Paper, Mead-Westvaco and genomics company Genesis Research & Development, was set up in 2000 to develop tree species using genetics.

The partners had advised that any change in control of Rubicon would require their consent and that would depend on whether GPG would allow Rubicon to meet five-year funding arrangements.

The three major founding partners, including Rubicon, promised to invest US$4 million ($8.1 million) a year and that agreement has 2 1/2 years to run.

"If consent is not given by a majority of the non-Rubicon ArborGen partners, then those partners may take the view that a breach of the ArborGen agreement has occurred and seek to expel Rubicon from the partnership," Rubicon chief executive Luke Moriarty said yesterday.

Gibbs said GPG always honoured legitimate legal contractual arrangements when it took a company over.

The GPG offer for Rubicon, which is aimed at gaining influence on Fletcher Challenge Forests, has not been recommended by directors and is not supported by an independent report by Grant Samuel.

GPG is contesting disclosure of shareholdings in Rubicon and disclosure of executive pay plans. The latter issue has been referred to the Stock Exchange's market surveillance panel.