Tenon battles for consent

By Duncan Bridgeman

Friday 16th July 2004

Wood processor Tenon might seek a time extension if it fails to obtain third-party consents for the transfer of forestry rights and leases held in the Tarawera forest estate.

Tenon needs consents by the end of August to return capital to its shareholders after the company sold the estate for $165 million.

Tenon company secretary Paul Gillard said the negotiations were continuing and the company would give a progress update near the end of the month.

So far the company has informed the market of consents covering approximately 40% of the total value of non-freehold assets.

But a spokeswoman for Maori Investments, which holds title to key parcels of land throughout the estate, said it had yet to sign any documents.

"It could be a while."

Maori Investments would make no further comment while chairwoman Bev Adlam was away overseas.

Tenon is to make its second capital repayment to shareholders of up to $1.15 a share now that the sale of the estate to Kiwi Forests Group and US-based Hancock is complete.

A full payout is dependent on third-party consents. If negotiations falter or are delayed, the properties concerned will remain in Tenon's hands.

Analysts say Tenon would probably seek time extensions if the necessary consents were not obtained. The company was recently subject to a successful partial takeover by existing shareholder Rubicon, which paid $1.95 a share for its 50.01% stake.

Meanwhile, Tenon is expected to acquire the remaining one-third of North American distribution company Empire in November for $25 million as part of its new emphasis on processing.

Analysts are bullish on the performance of Empire, which is forecasting revenue of $US150 million in 2005.

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