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Tenon in exclusive talks to sell remaining NZ operations

Friday 23rd December 2016

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Tenon, which sold its US operations for US$110 million, is in exclusive talks with a potential buyer of its remaining New Zealand assets, which would see the former Fletcher Challenge entity wound up. 

The company today distributed US$71 million to shareholders, cancelling one out of every two shares held and returning $2.20 per cancelled share, and has entered exclusive talks with one party with the goal of signing a sale and purchase agreement for its Clearwood New Zealand business, it said in a statement. If a deal is signed, surplus cash would be returned to shareholders and the company liquidated at an estimated cost of US$8 million. 

"The proposal is conditional upon a number of items (including Tenon shareholder and court approvals) which Tenon is currently assessing," it said. "Grant Samuel will be asked to prepare an updated independent report to Tenon shareholders once final agreement has been reached." 

The New Zealand business was valued at between US$63.3 million and US$74.1 million in independent adviser Grant Samuel’s report on the US transaction. Its sales rose 5 percent to US$81 million in the year ended June 30 while earnings before interest, tax, depreciation and amortisation more than doubled to US$12 million.

Tenon said the Grant Samuel report will update the "average adverse currency movements" among other things. 

Separately, Tenon said Rodger Fisher will leave the board at the end of the year and will be replaced by Wood Engineering Technology director Stephen Walker. 

Tenon shares last traded at $2.20.

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