Rubicon bid now a waiting game

By PAM GRAHAM

AMP Capital Investors' four-man investment team met just before 3pm yesterday and chose not to hand Rubicon control of Tenon.

The country's largest fund manager decided to accept Rubicon's $1.95 a share offer for less than half of its 6.85 per cent holding, taking what it called a "neutral" position on the bid.

Rubicon had acceptances representing 43.8 per cent of Tenon yesterday, before AMP made its call.

It may still get to its goal of 50.01 per cent, depending on the contents of mailbags being counted by Computershare. The bid closed at 5pm yesterday.

"With our holding they clearly won't get there, it depends on other retail and wholesale shareholders," said Nat Vallabh of AMP, who had his telephone turned off for most of the last two days in order to get on with non-Tenon related work.

AMP chose not to sell out completely, even though it is sitting on a profit on the holding, because it still sees value in the company Fletcher Challenge Forests became once it sold its forest estate. Also, it took the view that if the bid failed, it would be happy to buy in at lower levels.

Still, it, with many investors, is wondering how the acrimony created by the bid will be resolved.

If Rubicon gets control a boardroom purge is expected. If it does not, things will be interesting, analysts say.

Rubicon, a holding company for Fletcher's old forest technology assets and a cornerstone holding in Tenon, is still confident it will achieve its goal of moving from a 19.9 per cent stake to 50.01 per cent of Tenon.

The final throws of the bid were a bit like election night, said Tony Gibbs, of Guinness Peat Group. You just waited for the numbers to come in.

GPG is supporting the Rubicon bid for Tenon, in a turnaround of what was an acrimonious situation.

The final notice on the bid is expected to be filed today. If it is not successful shareholders get their shares back.

The exact amount AMP accepted for will be revealed within days in a substantial shareholder notice.

"I still think we are going to get there," said Gibbs.

He has rejected the suggestion that the takeover was a breakup play.

Market theories include Tenon being the catalyst for a restructuring of wood processing in New Zealand.

Carter Holt Harvey has made it clear that it is interested in Tenon's structural saw milling assets, but it did not bid for Tenon.

Any bidder for Tenon has had to take account of the fact that Rubicon had 19.9 per cent of the company, GPG had another 2.17 per cent and US hedge fund Perry 4.99 per cent.