Forum Archive Index - April 2000

["Jane Hunter" <jhhunter@ts.co.nz>]

For my two pennies worth as I understand it the due diligence won't be
anything spectacular.  It's a process that lawyers undertake everyday
whether you're buying the corner diary or a company the size of FFS.  I
understand that issues will exist over the ownership of NZ Forests by an
overseas consortium and that may be the tricky bit.

Having said that hype is still a powerful tool as we have seen already and
FFS has to be worth a play for that reason alone.

Happy trading.  I bought some FFS and plan to be in for some more.

Regards

Jane
-----Original Message-----
From: Oliver Shapleski <oliver.shapleski@vuw.ac.nz>
To: sharechat@sharechat.co.nz <sharechat@sharechat.co.nz>
Date: Wednesday, 19 April 2000 09:37:PM
Subject: [sharechat] Of due diligence and Fletchers


>I get the feeling not many people even understand the process of due
>diligence, nor the complex nature of asset and liability ownership among
the
>Fletcher group.
>
>The legal issues are huge!  Any company (and I've heard of one in
particular
>that isn't Norske) looking to buy one of the FC companies is taking a major
>punt because it simply is not clear which assets and liabilities are to be
>attributed to each division, and some A&Ls will be split among two, three
or
>all four.
>
>Norske in picking up the first one may be able to "carve the cream" so to
>speak, particularly when it comes to tax losses.  This means Norske may be
>in the best position to take a punt on one more FC co to really ensure that
>they extract full value from the two divisions.  That said, investors
should
>also consider the possibility of a hostile takeover of one of the
divisions,
>the closer the group gets to sorting out its balance sheet.  I've a feeling
>there may be one or two parties undertaking "due diligence" that are
unknown
>to FC (I insert the "" of course because hostile buyers never get the
>opportunity to carry out the real due diligence process).
>If that's the case, then a hostile buyer would want to put an offer out far
>ahead of the offers from "more agreeable" suitors - my reasoning leads me
to
>the conclusion that a low-end bid of $1.10-$1.20 may be on the cards in the
>next fortnight for FFS, being a couple of weeks ahead of any bid by the
>likes of Norske.
>
>QED I'd take any comment from FC PR with a grain of salt - they don't
>necessarily know everything...!
>
>Discl: Don't hold any FFS, FLP, FLB or FEG but if I had some cash I'd be
>putting $1 each way on two of the remaining three.
>
>
>
>
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