Tenon mills for sale after 'credible approaches'

By PAM GRAHAM

Tenon has put a "for sale" sign on its structural timber business which has mills near Kawerau, Rotorua and Mt Maunganui.

The indication of a formal sale process yesterday came after speculation that Carter Holt Harvey and Weyerhaeuser had been talking to the company, and is designed to maximise price.

"We would not entertain a sale unless we receive a full and fair value for the business," said Luke Moriarty, chief executive of Rubicon, which controls Tenon.

In May, Grant Samuel valued the business at $123 million to $144 million. It produces operating earnings of more than $20 million a year.

The business' assets include a large sawmill and remanufacturing plant in Kawerau, the Rainbow Mountain sawmill south of Rotorua, the Mt Maunganui Plywood Mill and the Ramsey Roundwood pole and post-maker.

Carter Holt Harvey has said it is a potential buyer of Tenon's structural timber assets, but all the company was saying yesterday through spokesman David Jamieson was no comment.

Processing structural-grade timber for the Australian and New Zealand market is a core Carter Holt business.

Tenon would be left with an appearance-grade timber business, including a sawmill that feeds its Taupo mouldings plant, an American distribution network and a venture with a European furniture-maker.

Analysts said Carter Holt had a new sawmill near Marsden Pt on its drawing board and it would be less likely to go ahead if it bought the Kawerau sawmill, which was the jewel in the Tenon portfolio.

Tenon's mills produce Origin timber, which sells to the Placemakers chain. Its products were not caught up in the weak wood investigation by the Commerce Commission.

Tenon chairman Tony Gibbs said the company had received credible unsolicited approaches in recent weeks for its structural business.

"The board has determined that in the interest of all shareholders, this opportunity must be explored."

The Tenon annual meeting is being delayed while the months-long sale process is under way.

Structural Assets

Kawerau sawmill: Makes kiln-dried, machine-stressed framing.

Kawerau remanufacturing plant: Makes finger-jointed and laminated lumber for the Australasian housing market.

Rainbow Mountain sawmill: Makes kiln-dried, visually graded framing timber.

Ramsey Roundwood: Makes landscaping products.

Mt Maunganui plywood mill: Makes standard and treated structural plywood and dried veneer.