Fran O'Sullivan: Gambling man on a roll once again

Kiwi billionaire Graeme Hart has leaped from foods to forests in yet another bold move that underscores his taste for the big gamble.

Hart's takeover bid for Carter Holt Harvey caught its independent directors by surprise. Their advisers, Cameron & Co, had been canvassing options for a breakup.

But Hart went straight to the main man in New York - International Paper chief executive John Faraci - and struck a deal to acquire its majority stake and drive the breakup equation.

The takeover bid values Carter Holt at $3.3 billion - and the International Paper stake at $1.652 billion - but the share price is already above $2.55 as arbitrageurs and hedge funds take a one-way 10c bet that Hart's move will continue to push up the share price and add value, particularly when he begins carving up the company.

Hart's reputation as a deal-maker extraordinaire is now cemented.

His commercial career lifted off when his Rank Group came from nowhere to bid for the former state-owned Government Printing Office in 1989. Ironically, former Prime Minister David Lange - who died on Saturday - related in his just-published memoir, My Life, that he had refused to sign the sales agreement because the price did not reflect the "extraordinarily generous terms" being offered to the buyer.

"It went back to Cabinet, which directed me to sign, and again I declined," wrote Lange. "Cabinet changed the rules so that another minister could put his name to the agreement ... That was as much resistance as I chose to make. I did not want another fight."

In fact, the sale was so badly mangled by Treasury officials, who were neophytes at asset disposals, that the Government later had to rebate Hart part of the $23 million purchase price.

He has since proved his ability to extract value from big plays such as the acquisition of Australian food group Burns Philp, more recently Goodman Fielder and, last week, with an innovative asset swap that saw dairy giant Fonterra buy back part of a company it sold to Hart three years ago.

CHH's independent directors are caught in a conundrum. Cameron & Co had been working with them on breakup options until Hart's deal undercut their moves. An appraisal report will be sought.

But with International Paper having signed a "lock-in" deal, options are truncated. On past performance, minority shareholders will want to go along for the ride.