Billionaire Graeme Hart looks set to revise the terms of his takeover offer for Carter Holt Harvey after officials ruled it breached takeover regulations.
Hart has given an undertaking to the Takeovers Panel to bid $2.75 a share for the forestry giant if he proceeds with his current offer, which
values the forest giant at $3.6 billion.
The undertaking reverses an earlier plan to pay the $2.75 only if he lifted his CHH interest from his current 85.7 per cent to 90 per cent within seven days of officially making the offer.
After seven days, he planned to only pay $2.70 a share and only if he got to 90 per cent - the threshold at which he compulsorily can acquire all shares.
Hart and his advisers would not comment. But before the ruling Hart said he had inserted the inducement clause to end the matter as soon as possible.
CHH's shares rose 1c to $2.73 amid expectations that a $2.75 bid was likely.
"The market would be surprised if Hart did not come back at $2.75," said Tyndall Investment Management's Rickey Ward.
The panel said the limit on the full offer of $2.75 effectively shortened the offer period below the minimum 30 days to seven business days.
"In the panel's view, the Takeovers Code does not allow bidders to introduce terms for a differential payment, dependant on early acceptance by the holders of a stipulated number of shares."
Hart can now launch a formal offer at $2.75 a share from tomorrow. He could also decide to launch another offer at a different price or let it lapse altogether.
Rank closed an earlier $2.50 a share offer last month with 85.7 per cent of the company. A $2.75 a share bid values the remaining 14.3 per cent at $514 million, but this is just $46 million more than he was paying for the stake under the original $2.50 a share offer.
Hart wants full control to take CHH out of the public eye, giving him greater flexibility to restructure the forestry group.
