US hedge fund ups Rubicon stake

By Paul McBeth

Tuesday 31st March 2009

Knott, a US based series of associated funds managed and administered by Dorset Management Corp., has made a partial takeover bid for the wood products and biotechnology investor Rubicon.

The offer of 70 cents per share for a total of 8.83% would take Knott's holding in Rubicon to 27.33%, and with Knott associates included, Knott interests would hold 28.31% of the company.

Rubicon owns forestry biotechnology company ArborGen LLC and wood processor Tenon Ltd.

"The Board recommends that shareholders await the Offer and Rubicon's response to it," the company said in a statement to the NZX. "For Knott and associates to move to 28.31%, approval must be obtained from a majority of Rubicon shareholders."

The company acknowledged Tenon faced a difficult time in the coming six months due to the slowdown in the US economy, in its half-year report, but was more upbeat about the prospects for ArborGen. Its stock has tumbled almost 40% in the past 12 months to 55 cents, and remains unchanged in today's trading.

If the offer is successful, Dorset, of whom David Knott is the sole shareholder and director, will control the acquisition, disposition, and voting of the funds' holding. Knott is a director for the San Diego-based biotechnology company Ligand Pharmaceuticals Inc.

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