Carter Holt float could raise billion

Graeme Hart. Photo / NZME.

New Zealand's richest man, Graeme Hart, is understood to be planning to float most of Carter Holt Harvey in what could be the biggest IPO this year.

Hart's Rank Group bought CHH almost a decade ago and has been carving up the business since, with the Carters outlets and timber products the last piece of the company to be sold.

The building supplies division with exposure on both sides of the Tasman could, according to one market source, raise as much as $1 billion based on earnings multiples but subject to price and demand.

Brokers Credit Suisse First Boston and First New Zealand Capital are believed to be working on the float, which could hit the share market around the middle of the year.

In an IPO, Hart would be expected to retain a cornerstone stake of around 30 per cent in the business, which is comprised of more than 50 Carters Building Supplies businesses in New Zealand, Woodproducts New Zealand and Woodproducts Australia. Brands include Pinex and Laserframe.

Last year it was reported CHH's building supplies business was for sale after taking combined charges in 2011 and 2012 of $393.8 million in impairments on its underperforming timber and plywood businesses across the Tasman on earnings of around $2.1 billion.

In 2006 Hart paid $3.6 billion for Carter Holt Harvey, which was then comprised of forests, farms and a pulp and paper division as well as the building supplies and timber products part of the business.

In 2013 Hart finished offloading all 30 Carter Holt Harvey farms that were converted from forests in Rotorua and South Waikato.

Bloomberg ranked Hart at 145 on its billionaires list last year with a fortune of US$8.4 billion ($11 billion), down US$342 million for the year.