GPG calls Rubicon advisory "mischievious"

By NZPA

Monday 4th November 2002

Guinness Peat Group's New Zealand director, Tony Gibbs, accused Rubicon of "mischief-making" for issuing a statement of concern about its biotechnology offshoot, ArborGen.

Today Rubicon, which is under a partial takeover offer from GPG, said the other joint venture partners in ArborGen had been given legal advice that a successful bid by GPG could require their consent in relation to the future of ArborGen.

Rubicon owns 31.67 percent of ArborGen, an equal share with International Paper and MeadWestvaco Corp, and Auckland biotechnology company Genesis owns a minority 5 percent stake.

Rubicon said its own legal advice was that the ArborGen partners' consent was not important to a change of control at Rubicon's helm.

But it was clear the partners were concerned Rubicon might not be allowed to meet its remaining five-year funding requirements towards ArborGen .

"If consent is not given by a majority of the non-Rubicon ArborGen partners, then those partners may take the view that a breach of the ArborGen agreement has occurred and seek to expel Rubicon from the partnership," chairman Michael Andrews said.

"Given that one of the conditions of the GPG partial offer for Rubicon is, in effect, that there are no prejudicial change of control issues arising out of the offer, we have alerted GPG to this new issue and will be discussing with them how they wish to proceed ."

But Mr Gibbs said it was all a storm in a teacup.

"GPG does not make takeovers for companies and then break legal contractual commitments and that's the end of the story."

Mr Gibbs added that he had only just been given any information on ArborGen today.

"They (Rubicon) have denied us all information on the company."

GPG is seeking to taking a 50 percent controlling stake in Rubicon by adding to its current 21 percent stake.

However, its 75c per share offer has not had many takers. An independent valuation by Grant Samuel & Associates valued the stock at 98c to $1.28 a share, higher than its current trading price of 72cps.

Grant Samuel's report also indicated ArborGen contributed a substantial amount of Rubicon's value. It put ArborGen at $49 million to $98 million, or 18c to 35c per Rubicon share.

But GPG contests those valuations and has also called on Rubicon to disclose whether it has a "phantom options" or "stock appreciation rights" plan for executive pay.

The Stock Exchange's market surveillance panel said it would investigate.

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