Hart sells forests, buys US mill

Graeme Hart has sold the bulk of Carter Holt Harvey's forests to Hancock Natural Resource Group, the world's largest specialist manager of forest investments.

At the same time New Zealand's richest man is reported to have bought a paper mill in the US that is one of the world's largest producers of paper used in the packaging of liquids.

Neither transaction was confirmed by Mr Hart's Auckland office today though both are likely to be in the billion dollar plus bracket.

The transactions came amid media reports that holiday makers in Fiji got a lesson in partying while Mr Hart's luxury yacht was moored there a week ago.

Mr Hart bought Carter Holt Harvey, New Zealand's largest forestry company, for $3.3 billion last year.

It was seen as a bold move into an industry he knew nothing about. It was known that Mr Hart had put Carter's forests, spanning about 220,000ha in different locations around the country, on the market and that final bids were due.

The bidders were believed to be Global Forest Partners, Hancock, and Babcock & Brown, all foreign owned.

Today Hancock confirmed that it was a buyer.

"We are very pleased that we were able to reach agreement with Carter Holt Harvey to purchase the bulk of their high quality new Zealand timberlands," the timber management organisation (TIMO) said in a statement to NZPA.

"This is a private transaction. The terms of the deal are confidential and hence we are not at liberty to discuss them."

Hancock will not be the final owner. TIMOs manage forestry investments for either individual or groups of clients.

Hancock was widely believed to be a failed bidder for the giant Central North Island Forest Partnership estate sold from receivership to Harvard University's endowment fund.

Hancock has since purchased some forests in New Zealand from Harvard and it manages 40,000ha of the former Fletcher Challenge forests, including the Tarawera Forest.

TIMOs typically manage forests, not processing mills. Their entry into New Zealand has changed the forestry industry's structure by separating wood ownership from wood processing.

Hancock is owned by Canada's Manulife Financial Corp and its timber management unit Hancock Timber Resource Group is based in Boston.

Industry speculation is that Hancock paid top dollar for the Carter Holt forests. It already has approval from the Commerce Commission and the transaction is expected to have to go through the Overseas Investment Commission.

Carter Holt's estate is the biggest to come on the market and it was believed to be worth around $1.5 billion.

The CNIFP estate sold for around US$650m ($1 billion) and Fletcher sold its forests for $725 million.

Meanwhile, Mr Hart was reported to have purchased the Pine Bluff mill in Arkansas and other international beverage packaging plants from International Paper.

No sale price was disclosed but analysts said it was likely to be an investment in the US$500 million to US$600 million range.

IP, the world's largest forestry company, is in the process of selling between US$8 billion and US$10 billion of assets, one of which was its majority stake in Carter Holt.

Pine Bluff is one of the world's largest producers of paper products used for packaging liquids, according to IP's website.

It has two paper machines, one makes 195,000 tons a year of coated paper and the other makes 450,000 tons year of liquid or beverage packaging paper.

- NZPA