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Market starts guessing as Fletcher defers dividends

By Ben Dutton

Monday 25th September 2000

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In an ambiguous announcement to the Stock Exchange, Fletcher Challenge has said it will defer paying the dividend for its Building and Energy divisions until a final decision has been made on the group's separation process.

The record date was supposed to be on August 29th, 2000 but investors will now have to wait for Fletcher Challenge's board to announce another record date - or a sale recommendation.

As the board of Fletcher Challenge previously said that the dividends would be payed "unless the separation process of the Company resulted in a third party sale recommendation" the market is playing a guessing game on what division may be on the block.

Fletcher Energy is seen by many market watchers as the division most likely to go first. Shell Oil lodged an application with the Commerce Commission to acquire the New Zealand operations of Fletcher Challenge Energy on August 21st, 2000. The Commission has delayed reporting its decision, but is expected to come back with an answer shortly.

Forests has also seen its fair share of whispers over the past few months, however the share price remained steady at 80 cents at the time of this morning's announcement, while Energy and Building both jumped. This may suggest that the market feels Energy or Building are the next most likely contenders for a sale.

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