GPG won't confirm if stalking Central North Island forest

By NZPA

Wednesday 2nd October 2002

Guinness Peat Group today would neither confirm nor deny whether it was stalking the Central North Island Forestry Partnership, currently in receivership.

New Zealand director Tony Gibbs told NZPA from Chicago today that he had had talks with the receiver, Ferrier Hodgson but would not elaborate further.

Asked if GPG was interested in buying the company, Mr Gibbs said: "I'm not confirming it and not denying it. Have I spoken to the receiver, yes, but I am not prepared to confirm or deny anything other than that," he said.

Mr Gibbs said he was constrained in what he could say, adding that people could work out why.

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

GPG in August used its small holding in Fletcher Forests to help sway a shareholder vote against that company buying CNI for $US650 million ($NZ1.390 billion).

GPG, chaired by Sir Ron Brierley, said at the time it wanted to be central to the rationalisation of the New Zealand forestry industry.

It is currently attempting a partial takeover offer of Rubicon, Fletcher Forests' 17.6 percent owner. The takeover offer, recommended against by Rubicon's directors, could lift GPG's stake from 20 percent to over 50 percent.

Mr Gibbs would not comment on his plans for rationalising forestry in New Zealand.

CNI would be central to any rationalisation with its 163,000ha Kaiangaroa plantation.

When GPG made its $67 million partial takeover 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.

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

Rubicon, as the largest single shareholder in the country's second largest forest owner, Fletcher Forests, may hold the key to Fletcher Forests' efforts to raise capital for another bid for CNI.

GPG is 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.

China's Citic group is very interested in CNI. It jointly owned CNI with Fletcher Forests before it went into receivership, and figured heavily in Fletcher Forests most recent plan to buy CNI. Had that plan proceeded, Citic would have had a 35 percent controlling stake in Fletcher Forests.

Mr Gibbs opposes Citic owning CNI, saying the company should be a customer, not an owner, of the forest and has said Citic does not figure in his plans for the rationalisation of ownership of the industry.

GPG's shares were up one cent at $1.60 today, Fletcher Forest was 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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