KEY POINTS:
Fletcher Building still wants to buy parts of Graeme Hart's $2 billion Carter Holt timber and paper business, but not the Kopu sawmill or other timber processing plants.
Jonathan Ling, Fletcher's chief executive, said yesterday market conditions had changed considerably since last year when his company initially expressed
an interest in buying parts of Carter Holt.
"We're still interested. Despite the economic changes, we're still keen on some bits," Ling said.
Analysts said yesterday Fletcher had flatly rejected investigating buying any major timber or paper processing plants from Hart - New Zealand's richest man - including the Kopu mill near Thames which faces being shut down. Instead, Fletcher wants Carter's retail business, they said.
Carter Holt owns one of the Thames district's largest employers which faces the chop with the loss of 145 jobs.
Mill staff and union officials were shocked to learn this week that the facility was likely to become a casualty of an over-supply of timber products and the chances of its survival were slim.
Last year, Hart put Carter Holt Harvey's wood product and distribution business on the market for an estimated $2-2.5 billion but so far it has yet to sell and regulatory issues are part of the problem.
In November, Japan's Sumitomo Forestry Company applied to buy some of the assets, including Carter Holt's Rangiora medium-density fibre board assets outside Christchurch.
On March 20, the Commerce Commission rejected Sumitomo's application, citing anti-competitive reasons.
Sumitomo also struck opposition from the Australian Competition and Consumer Commission over bids to buy Carter assets across the Tasman.
Fletcher is understood to want the profitable Carters building supply stores, which would fit well with its strong retail model which includes the dominant Placemakers chain.
Ling said he could not comment on Carter's mill facilities but financial experts said this part of Carter's business was regarded as largely unprofitable and a financial burden.
Insiders said Hart had been keen on selling Carter Holt as one business last year but he might now consider cheaper bids and and partial offers in a more favourable light.
Fletcher, with a market capitalisation of $4.2 billion, is trading at just $8.30, down from an annual high of $13.42. A sinking share price has seen about $2 billion wiped off its market capitalisation in the past few weeks.
Meanwhile, bids have just been made for Carter's former headquarters in Manukau. Yesterday was the close-off date for tenders on the 8.2ha property to go to agents CB Richard Ellis.
Australian investor Valad Property Group bought the site and other Carter properties from Hart for $277 million last year but put the Great South Rd real estate back on the market just eight months later.
Last month, Hart rocketed 135 places up the Forbes rich list, outstripping Richard Branson and Donald Trump. With a net worth tipped at over $6 billion, he is at No 201.
MILL PURCHASE UNDER REVIEW
Part of Carter Holt Harvey's empire is under an industry watchdog's gaze.
The Commerce Commission is investigating Carter's acquisition of TDC Sawmills in December 2006.
It wants to determine whether the purchase lessened competition.
"This is an investigation under section 47 of the Commerce Act," a spokeswoman said yesterday.
The act provides for a voluntary notification regime for deals where parties contemplating a purchase can submit an application for clearance or authorisation about its status under the law.
"If parties choose to proceed with an acquisition without seeking prior clearance or authorisation and the commission considers the acquisition would contravene section 47, it might seek an injunction to prevent the acquisition going ahead," the spokeswoman said.
"If the commission becomes aware of a completed acquisition that it considers may contravene section 47, it might apply to the High Court to seek a declaration of a breach and various remedies, including injunctive relief, penalties and divestment," she said.