Forum Archive Index - October 2002

["Maria Smith" <smith@ps.gen.nz>]

Hi Hoop Snoopy

Both of your comments are appreciated.

I forgot to mention that i hold FFS (purchased recently at 22c).

My main reason for bringing up this matter is that GPG has stated that they
want to rationalise the forestry industry. They will want to do so in such a
way to make a good profit for themselves but will not want to end up with an
asset which they find difficult to dispose of. Look at Brierley with
Thistle.

I believe that they want to create a Fonterra of the industry which can only
benefit both FFS and CAH. If I am right then why is the share prices of
these companies not reflecting the benefits likely to accrue.

One other point is that CITIC have made no secret of the fact that they want
in with our forests and are prepared to pay good money for a stake. We have
CNIP for sale at a cheap price yet they no not appear to be doing anything
about it.

The other point I did not make is that if GPG do end up with a substantial
shareholding in our forests then this could be difficult to on sale. Just
look at how long it is taking the Reciever of CNIP. There does not appear to
be a large amount of interest unless it is sold at a low price in relation
to its value.

My conclusion is that GPG will not want to hold long term (as with Thistle)
and will have an exit strategy already mapped out.

Regards Greg.




-----Original Message-----
From: tennyson@caverock.net.nz <tennyson@caverock.net.nz>
To: sharechat@sharechat.co.nz <sharechat@sharechat.co.nz>
Date: Sunday, October 06, 2002 10:02 PM
Subject: Re: [sharechat] GPG FFS RUB CAH


Hi Hoop and Greg,

My interest in this quartet is holding shares in CAH.  My objective
is long term to have a share in an industry where theoretically NZ
has a strong competitive advantage, and in the medium term benefit
from the undervaluation of the whole forestry industry.

I had a few FFS a few years back, but sold out at 90c preferring to
concentrate on what I saw as the stronger company - CAH.  I have
to admit holding CAH has been disappointing over the timeframe
since, but not nearly as disappointing as if I had held onto FFS as
well!  I note that CAH is the only one of this quartet of companies
paying a dividend, if you discount the token effort by GPG.

I think the fact that both the FFS and CAH share price are meandering
downwards has more to do with paper product prices and general market
weakness rather than company specific factors.

I can't see why it is necessary to have control of CAH if they agree
with what you are doing.  I think the reason that GPG have jumped
aboard the FFS and Rubicon ships is that management of those
companies do not agree with what GPG is trying to do.  I think GPG is
looking at the long term export potential of having a more integrated
wood industry.  Because this is an export matter, I'm picking that
commerce commission approval is very much a side issue.

I can't see International Paper making a full bid for CAH, as they
have had many years to do so at even more favourable terms than
today.  I also can't see the US banks jumping over themselves to lend
International Paper the money to do it.

SNOOPY


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"Sometimes to see the wood from the trees,
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