Battle for Tenon hots up

By Duncan Bridgeman

Friday 7th May 2004

Maori leaseholders won't say if they plan to play hardball over the sale of Tarawera Forest estate as another dogfight between Tenon and its biggest shareholder, Rubicon, looms.

Kawerau-based Maori Investments has an 11% share in Tarawera Forests and holds title to key parcels of land throughout the estate.

Tenon needs consents for the transfer of forestry rights and leases in order to return capital to its shareholders after the company agreed to sell the estate for $165 million.

A spokeswoman for Maori Investments, chairwoman Bev Adlam, said the organisation would not comment while negotiations with Tenon were continuing.

Tenon recently announced to the stock exchange that it had received consents covering approximately $82 million or about 40% of the total value of non-freehold assets at issue.

The company has until the end of August to obtain all necessary consents but it must talk to about 100 separate Maori interests in the meantime.

The issue is expected to be included in a series of risks that Rubicon will outline in a partial takeover offer to shareholders tomorrow.

If the lease negotiations falter or are delayed, the properties concerned will remain in Tenon's hands or possibly Rubicon's if its partial takeover is successful.

The Rubicon report is also expected to focus on the speculation in the market of a competing bit, which is seen as underpinning the Tenon share price.

Fletcher Building and Carter Holt Harvey had been touted as possible bidders but both have since dismissed the notion and no other candidate has indicated any interest.

All this suggests Rubicon is steeling itself for an independent report on the takeover by Grant Samuel, expected to be released early next week.

Tenon and Rubicon have already clashed heavily over Rubicon's $1.85-a-share offer for the 30% it needs to control Tenon.

Tenon values the shares at between $2.06 and $2.32.

Meanwhile, Tenon confirmed this week it did not need shareholder approval for the sale of the Tarawera Forest estate.

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