Wood processor Tenon's independent directors have cried foul over suitor Rubicon's offer of a handling fee to third parties who induce Tenon shareholders to accept Rubicon's bid.
Tenon, formerly Fletcher Challenge Forests, yesterday filed a complaint with the Takeovers Panel saying the handling fee constitutes an unauthorised variation to its partial
takeover offer. Rubicon, a remnant of Fletcher Challenge, last week upped its offer to $1.95 a share from $1.85.
The near 20 per cent shareholder is seeking to move to 50.01 per cent and its bid is supported by its near 20 per cent shareholder Guinness Peat Group (GPG). Rubicon's other major shareholder, Perry Corp, owns 4.99 per cent of Tenon.
Rubicon announced on Wednesday that it would pay a handling fee of between $50 and $750 per acceptance to trading participants on the NZX, who obtained acceptance of its offer from Tenon shareholders.
Tenon's independent directors said the introduction of the handling fee within the 14-day period prior to the closing date of Rubicon's offer, during which no changes could be made to the offer, constituted an unauthorised change in the terms of the offer.
Tenon's independent directors said they recognised there was a precedent for Rubicon's inducement fee and that "no reputable broker or adviser would fail to advise their clients that they were receiving a benefit if their clients agree to sell their Tenon shares to Rubicon".
Rubicon said yesterday that Tenon's complaint was "absolutely ridiculous".
"We strongly disagree with Tenon's statement, and believe that the Tenon independent directors' view may be coloured by the fact that Rubicon is now receiving an increase in acceptances under its offer."
On Tuesday this week Tenon's independent directors advised shareholders not to accept Rubicon's increased bid for the company.
Rubicon said yesterday its Tenon shareholding had grown to 21.09 per cent from 19.99 per cent as 3687 shareholders accepted the offer.
It is understood that Brook Asset Management, holding an estimated 2 to 4 per cent of Tenon shares, has agreed to accept the offer. It is believed at least one other institution has accepted.
Goldman Sachs JBWere has started a telephone campaign to woo retail investors. The offer closes next Thursday.
- NZPA, Paul Panckhurst
