11.30am
Wood processor Tenon this morning advised shareholders not to accept Rubicon's $1.85 a share partial takeover offer.
In a statement to the NZX, Tenon said its independent directors had unanimously recommended that shareholders reject the offer for a number of reasons.
It said the offer price was below the company's current share
market valuation, and was well below independent adviser Grant Samuel's valuation range of $2.01 to $2.22.
The company also said the offer did not include any control premium, was on only a partial offer, and was "highly conditional and there is no certainty that these conditions will be satisfied or waived".
Furthermore, Tenon said Rubicon had "not proposed any alternative strategy for delivering additional value for all Tenon shareholders".
Wood processing firm Tenon, formerly known as Fletcher Challenge Forests, said Rubicon's offer undervalued the company by between $45 million and $103 million.
"Since the announcement of Rubicon's intention to make a partial offer, Tenon's shares have consistently traded on the New Zealand share market at a price substantially above Rubicon's partial offer price," Tenon said.
This morning, Tenon shares were trading a cent higher at $1.90.
Grant Samuel & Associates were to release a report on the offer today, Tenon said.
Rubicon is seeking to increase its 20 per cent cornerstone stake to 50.01 per cent.
It "sweetened" its earlier offer last weekend by including an opt-out clause in the formal offer it sent to Tenon shareholders.
Shareholders who accepted Rubicon's offer would be able to withdraw from it if a higher offer emerged.
- NZPA
