GPG sides against Fletcher Forest deal

By NZPA

Monday 5th August 2002

Guinness Peat Group has confirmed it has a small stake in Fletcher Forests and says it will vote against Fletcher's current plan to buy up the Central North Island Forest.

Saying only that GPG did not believe the plan was in the interests of Fletcher Forests, GPG's executive director Tony Gibbs confirmed his company held a previously undisclosed stake in the forest company, which was under 5 percent.

GPG also holds a 19.9 percent stake in Rubicon, a key player in the CNIF purchase plan. Mr Gibbs said GPG would also vote against Rubicon selling its 17 percent shareholding in Fletcher Forests at a shareholders meeting on August 27.

"Furthermore, GPG believes that (the contemplated) Rubicon transaction is a major disposal and should be subject to a special resolution in accordance with the Companies Act," Mr Gibbs told NZPA.

Fletcher Forests' plan to the 160,000ha Central North Island Forest for $US650 million ($NZ1.416 billion) involves allowing Chinese company Seawi to take a 35 percent cornerstone shareholding in the New Zealand forestry company.

Seawi is owned by Chinese government company Citic, its former partnership in the collapsed CNIF partnership, currently in receivership.

Rubicon, a Fletcher spinoff, would sell its shares in Fletcher in exchange for cash and a $US64 million forest. The shares would be sold for 37c each, compared with the current market price of around 22c.

Fletcher Forest shareholders will vote on the plan at a special meeting on August 13, but one of its major shareholders, US investment firm Xylem, has applied for a court hearing on Friday to clarify whether Rubicon has valid voting rights.

Xylem, which holds 7.3 percent, disagrees with the plan on price and on the grounds that it is unfair to minority shareholders.

Fletcher Forests has told shareholders Xylem was originally in favour of the price but wanted to be involved in the deal.

Comments from our readers

No comments yet