Third Avenue lifts Rubicon stake

New York investment fund Third Avenue has increased its stake in Rubicon to 10 per cent, making it the fourth big-block shareholder in the wood processing and biotech investment company.

A fund manager said Third Avenue's move up from 8.5 per cent could reflect an interest in the future of wood processor Tenon, formerly Fletcher Forests, of which Rubicon owns 51 per cent.

Third Avenue's play means that four parties own 60 per cent of Rubicon's 279 million shares.

US investor Perry Corp owns 19.8 per cent, Sir Ron Brierley's Guinness Peat Group 19.9 per cent and AMP 10 per cent. AMP is building a stake in Tenon.

Third Avenue has become a significant Rubicon shareholder in the past year.

The fund manager said Tenon was regarded as undervalued, particularly in US dollar terms. If the Kiwi dollar fell, as many expect, Tenon's value would soar. Rubicon was not regarded as a long-term holder of assets but as a trader.

GPG's New Zealand director, Tony Gibbs, would only say he noted Third Avenue's increased shareholding.

Third Avenue is an unwelcome 10 per cent shareholder of New Zealand rail operator Tranz Rail, now 84 per cent owned by Australia's Toll Group. The fund stands between Toll and its hunt for 100 per cent of Tranz Rail, which it would delist from the NZX.

A commentator said that while Third Avenue's interest in Tranz Rail was viewed as a blocking stake, its motive in Rubicon was not seen as such.

Tenon got out of the forestry business in December 2003, selling its forest estate to a private consortium for $725 million.

In February, it announced the return of about $320 million to shareholders.

In the same month, it reported operating earnings of $28 million for the six months to December 31, up $3 million on the corresponding half-year.