Rubicon wins fight for Tenon

By PAM GRAHAM



The Fletcher Challenge probables beat the Fletcher Challenge possibles at the end of a corporate takeover play yesterday.

And as the players acknowledged that the tough contest was over, questions about the make-up of the team that would emerge and its impact on the wood processing industry were brushed aside.

"It is a clear win to Rubicon," said Guinness Peat Group director Tony Gibbs.

Rubicon declared its offer for control of Tenon unconditional yesterday after getting acceptances for its $1.95 a share offer from shareholders owning 58 per cent of Tenon.

It wanted only 50.01 per cent, so some shares will be returned to shareholders.

The bid from one former Fletcher Challenge company for control of another hung on a knife edge until the last day.

Gibbs, who is involved because GPG owns 19.9 per cent of Rubicon, took his wife out to dinner on Thursday night knowing that a large mailbag had arrived at Computershare's offices.

Rubicon chief executive Luke Moriarty said the bag was twice the size of that received the previous day and the acceptances inside it were for larger amounts.

"It blew us away," he said.

Gibbs rejected the suggestion that support from small shareholders in Tenon's 57,000-person shareholder base had been lacking.

"All this about mums and dads not supporting it was wrong because, oh yes, they were."

He said about 5000 shareholders sent in acceptances on the last day, and one-third of the shares Rubicon needed to get control of Tenon came from small shareholders.

New Zealand's biggest fund manager, AMP Capital Investors, waited until the last day to take a "neutral" position, selling less than half of its 6.85 per cent holding and effectively leaving the outcome to small shareholders.

Post-match commentaries offered little insight into what happens next beyond a boardroom purge at Tenon and continuing dissociation with the Fletcher Challenge past.

Tenon is the old core Fletcher Challenge company, and Rubicon is a holding company for Fletcher's tree technology and other investments.

"The point I would make, and I do mean this, is that this not only changes Tenon's life, it changes Rubicon's," said Gibbs.

Moriarty met Tenon chief executive John Dell yesterday to tell him that Rubicon was happy with the strategic direction of Tenon, but it wanted to get alongside management to make it happen.

Tenon made no comment beyond its statement to the exchange saying that Rubicon was taking control of a company in good shape.

"Strategies put in place over the last year have transformed the company into a business that is now generating good profits, has sound prospects, and has returned a substantial amount of surplus capital to shareholders," said chairman Sir Dryden Spring.

He said his relationship with Moriarty was "fine".

Rubicon is effectively a holding company for Tenon.

Analysts do not expect two listed vehicles to exist long-term and they want a bigger knife through corporate head office costs.

Neither Gibbs nor Moriarty wanted to "go there" on the day.

They did also not want to discuss analysts' theories that Carter Holt Harvey's saw mills should be put into a new joint venture with those of Tenon. Carter Holt has been clear that it would like to buy some of Tenon's saw mills.

"What happens next is that the management of Tenon runs Tenon," said Gibbs.

That was not to say that there would not be management changes. Rubicon would be a strong owner.

He and Moriarty said Tenon's board would change.

Moriarty said the focus was on creating shareholder value.

Gibbs said he was not dismissing the theories in the market, but neither was he saying they would happen.

TENON BOARD

Sir Dryden Spring (chairman, independent)

Michael Andrews (Rubicon)

Luke Moriarty (Rubicon)

Warren Larsen (independent)

Rodger Fisher (independent)

Michael Walls (independent)