GPG in talks with CNI receiver

By NZPA

Wednesday 2nd October 2002

Sir Ron Brierley's Guinness Peat Group and the receiver of the Central North Island Forestry Partnership (CNI), Ferrier Hodgson, today confirmed they were in talks.

However, neither party would confirm the exact nature of the talks or whether GPG was bidding for the 163,000ha plantation with another party, such as Carter Holt Harvey.

GPG director Tony Gibbs told NZPA from Chicago that he had had talks with the Ferrier Hodgson but would not elaborate.

"Have I spoken to the receiver, yes, but I am not prepared to confirm or deny anything other than that," he said.

He said people could work out why he was constrained in what he could say.

The Independent business weekly reported today GPG was in the advanced stages of due diligence on CNI.

Ferrier Hodgon's Mike Stiassny declined to say what stage talks were at or if he was talking to other potential buyers.

"GPG have clearly expressed an interest and is having a look at it."

The forest, which sits alongside those of Fletcher Forests and Carter Holt, the country's largest forest owners, is considered key to GPG's plans to integrate the processing and marketing of New Zealand's export wood resource.

In August, Fletcher tried to buy the forests and three sawmills in partnership with China's Citic, with whom it previously owned CNI. Although the $US650 million ($NZ1.39 billion) bid was accepted by the receivers, it was voted down by shareholders, including GPG.

Under that deal Citic would have controlled Fletcher Forests with a 35 percent stake, which GPG opposed.

GPG is offering $67 million for a controlling stake in Rubicon, in which it already owns 20 percent. Rubicon is Fletcher Forests' biggest shareholder with 17.6 percent.

GPG's takeover offer for Rubicon is opposed by Rubicon's independent directors.

Mr Gibbs would not comment on his plans for rationalising forestry in New Zealand but when GPG made its offer for Rubicon in August, it said the move was designed to consolidate the forestry industry.

Mr Gibbs explained then that GPG had similar motives to its moves to merge pipfruit marketing company Enza with produce wholesaler Turners and Growers -- to try to get the New Zealand sellers of a major commodity to speak in unity.

He said he was looking for a co-ordinated approach to selling New Zealand's forest products.

GPG is also locked in a legal battle with US hedge fund Perry Corp, which in July lifted its stake in Rubicon to 15.98 percent from 4.9 percent in circumstances which GPG is challenging. A hearing is due later this month.

Citic remains very interested in CNI but Mr Gibbs opposes it owning CNI, saying the company should be a customer, not an owner of the forest. Citic did not figure in his plans for the rationalisation of the industry.

GPG's shares closed flat at $1.59 today, Fletcher Forest closed down one cent at 22 cents and Rubicon was unchanged at 73 cents.

Rubicon's adviser, Grant Samuel, in its report rejecting GPG's takeover offer, criticised GPG for failing to provide detail on how it might consolidate and influence the New Zealand forestry industry.

Mr Gibbs would not say how GPG might fund a bid for CNI.

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