Forum Archive Index - August 2002
Please note usage of the Forum is subject to the Terms & Conditions.
[sharechat] LTI 'Out West' (6) - Fletcher Forests Felled
In August 2002, Fletcher Forest shareholders voted at a special
general meeting on a controversial deal. The plan was to buy back
from the banks, the trees in the Central North Island forest's
partnership.in conjunction with CITIC an investment arm of the
Chinese government. Ironically it was a disagreement between CITIC
and Fletcher Forests that had seen the partnership go into
receivership in the first place! Chairman of Fletcher Forests, Sir
Dryden Spring was championing the deal. He wanted scale and was
prepared to tolerate the exit clause that saw an unusually generous
exit payout for cornerstone shareholder Rubicon. 'Bit' shareholder
GPG represented by Tony Gibbs, and substantial shareholder Xylem
corporation opposed the deal. The meeting adjourned with counting of
votes going into the night.
The doors of the saloon swung open as a puff of wind wafted an
odour of sweet plantation pollen into the near empty saloon. A
tumbleweed rolled down the main street in botanic sympathy. It was
late, so late that only the gas lamps in the first floor bedrooms of
the hotel opposite and the near full moon broke the town's blackness.
The moonlight silhouetted the two horses standing still tied up
outside the saloon. These steeds were one of the few clues that this
was not a ghost town. It was night time, 'knight time' in more ways
At a round table in the centre of the bar were two men cowboy hats
on their heads, wearing thick crumpled moleskin coats. Sir Dryden
and Sir Dampkitchen were old ranchers from the mother land. They
were fruit ranchers for all seasons who ran a banana plantation on
the outskirts of town. On the table between the two men were two
piles of papers, by each man's hand was an empty beer flagon and in
the centre of the table was a small gas lamp, flickering and giving
the whole Saloon a yellow mustard afterglow. Behind the bar was a
third man stacking bottles and dirty glasses by way of a hand held
"Two thousand and nineteen, two thousand and twenty", slurred one of
the men at the table.
"Haven't you finished counting those votes yet Wet ('Wet' was
Dryden's own little nick-name for Dampkitchen)?", said Dryden,
peeking sleepishly out from under his hat.
"Yes, an hour ago Dry. I'm just checking our meeting allowance money
for the day and it's a nice little haul!"
Dampkitchen beamed as he grabbed the two piles of paper on the table
and held them out: two closed fists crammed with notes, just an
eyeballs reach from the other's face. Both men let out an
uproarious chuckle, before Dry composed himself again.
Dry didn't feel too bad about pocketing this money. The gardner's
they'd employed had saved that amount of cash on the hedging
so the shareholders would never miss it. Besides it was a tiny fee
by world class international business standards.
"The vote Wet , the vote. Are the townspeople going to let us go
in with the Chinaman or not?"
'The Chinaman'. As Dry had uttered those words his gut went cold.
The Chinaman, whose name was Wok Tee Hek, had arrived in town as some
sort of emissary for the Chinese government. Dry and Wok
had gone halves in the banana plantation next to his own. It seemed
like a good idea at the time, a partnership. But there was a fearful
row, east would not meet west and the whole banana plantation split.
It was a full twelve round verbal slanging match, with no winners.
Yet now there was Dry, looking to buy the land back off the bank with
the Chinaman as a shareholder! Something didn't quite stack up.
Why would Wok Tee Hek be content with a minority stake in the
proposed new deal? In a couple of years, when the gentlemen's
agreement on management of the crop expired, what would he do?
Dryden had visions of Wok Tee Hek stealthily stacking his Junk down
at the river jetty full of banana boxes in the dead of night. From
the jetty Wok Tee Hek would Shanghai off down the waterway to the
ocean and from there to China itself. Once in China he would further
process the goods. But perhaps Dry just had a vivid imagination?
After all why should anyone slip out of town, solely on bananas?
And what reason did he have not to trust the Chinaman?
Also on Dry's mind was the payout proposed for his own Aunt Ruby for
her share of the combined plantation. Sure she was going to
be offered near twice the price that the townspeople shareholders
could get. But she was family, and in order for the rest of the deal
to go through, Dry considered this arrangement was fair.
Thirdly there was the overall debt level all shareholders were taking
on. What if there was a downturn in the world market for bananas?
Dry had a counter plan for that possibility. If the world wasn't
buying as many, he'd just make the townspeople eat more!
Any doubts on the proposal were soon erased from his own mind.
What was he thinking of? He was still the big man around town,
right? A wink in the direction of his own waistline was
affirmation enough of this. The worst that could happen to him
within a couple of years was to have to let his belt out a notch or
two, to prepare his pocket for a bolstering with bullion. Bright
metal was ordained to be delivered to him via a golden parachute
pension plan, should he quit the land! Fresh from this satisfying
little day-dream, Dry's concentration snapped back to the present.
"The optimistic way of looking at the result is that we came second
Dry", Dampkitchen grumbled.
Dry screwed up his face, prised the hat from the top of his head and
cast it by the brim forcefully at the floor. When it came to a vote
result, ol' Dry didn't like to hear the 'L' word.
"Whiskey!, dry", Dry stuttered to the barman. The barman had left
the whiskey bottle on the counter in anticipation. He brought a
double with spring-water back to Sir Dryden.
Dry stared at the glass for two or three minutes. He knew that
inviting the townspeople to take shares in that plantation of his
was, in hindsight, asking for dissent. How could these small town
greenhorns have dare challenged the superior business brain of a real
ranch man, even if he did only deal with fruit? Those rough and
ready miscreants, Weiss and Gibbs, had been scratching around the
town for opposition to Dry's deal. They highlighted the 'Aunt Ruby
con' payout (as they termed it) as one point to argue against. These
two were spreading the word that the whole deal was just bananas,
something that even Dry couldn't deny. But surely only Sheppards
would have flocked to the cause of those two former farm advisers?
Dry grabbed the glass and in two swigs it was empty. Perhaps his own
methods of persuasion for the people had been too subtle?
Negotiations between the small shareholders and the big men at the
top had ended up as rough as sandpaper. Yet at the top there was no
friction between Wet and Dry.
"Wok Tee Hek!" "There's no deal to cut." "It's all been voted
down." "No additional plot of land to exploit, and no additional
land management fee to pocket.", was the terse verbal tirade that
came from Dry's lips.
Dry's mind was like a butter churner with all the deals and counter
deals being tossed around in his head: share exchanges, asset swaps
leveraged buyouts - nothing complicated or at all grandiose seemed to
be workable. And now his only option on the deal was to lump it.
Dry's brow furrowed and both ends of his bottom lip dropped as his
mouth morphed into the shape of a crestfallen inverted banana.
"You know what this means Wet", he said as he gloomily summed up,
to butter up Dampkitchen and salvage what he could from the
situation. After all, what had transpired that day could not
possibly reflect on his own credibility.
"There is nothing for it Wet, I can't see any other way to work the
business", added a resigned Sir Dryden. "We are just going to have to
create value out of our own trees by working the land - ourselves!"
Message sent by Snoopy
on Pegasus Mail version 2.55
"Dogs have big tongues, so you can bet they don't
bite them by accident"
To remove yourself from this list, please use the form at