Tenon: Say no to Rubicon

By PAM GRAHAM

Tenon's independent directors yesterday advised shareholders not to accept Rubicon's increased bid for the company.

Rubicon, a remnant of Fletcher Challenge, last week raised its offer by 10c to $1.95 a share. The near-20 per cent shareholder is seeking to move to 50.01 per cent and its bid for control is supported by its own near-20 per cent shareholder Guinness Peat Group.

Rubicon's other major shareholder, Perry Corp, has not commented but it owns 4.99 per cent of Tenon.

GPG director Tony Gibbs believes the increased offer will succeed.

"I think investors will sell into the offer just before closing date," he told Dow Jones.

Tenon advised its shareholders in a letter yesterday that its independent directors and senior managers would not be accepting the increased offer for their shares.

The offer was still highly conditional, still partial, still below the independent valuation by Grant Samuel and still not available to all.

"As disclosed in the Target Company Statement, a number of other parties have expressed an interest in Tenon since Rubicon announced its intended partial takeover. At this point, their interest has not produced a superior competing bid," the letter said.

"If there was another bidder they would have put up their hand by now," Gibbs said.

The independent directors said: "It is only fair to point out that Rubicon is offering a premium, (albeit small) on the current market price of $1.92, and needs only to acquire shares from the majority of a relatively small number of institutional shareholders who hold approximately 40 per cent of the company's share capital to obtain a controlling interest."

The directors did not believe it was in the best interests of shareholders to accept an offer that was unfair, undervalued the company, and provided no indication of new strategies.

The offer closes on June 3. Rubicon must disclose every 1 per cent increase in its holding and it has not put any notices out. It can also now extend its offer only if it gets approval from regulators.