TENON

[ari]

Rubicon issues Takeover Notice to Tenon - $1.85 per share


8 April 2004 - Rubicon Forests Limited ("Rubicon Forests"), a wholly owned subsidiary of Rubicon Limited, today announced its intention to make a partial takeover offer, at $1.85 per share, to all shareholders of Tenon Limited.

The Rubicon Group currently owns 19.997% of the shares on issue in Tenon. Under its Takeover Notice, Rubicon Forests' intention is to acquire ordinary and preference shares in Tenon to increase the Rubicon Group's shareholding in Tenon to 50.01%.

Under the Takeovers Code, the Offer cannot actually be made to Tenon shareholders until 14 days after the issuance of a Takeover Notice i.e. April 22. The two key conditions of the intended offer will be that the Rubicon Group achieves a 50.01% ownership position in Tenon, and that OIC consent (which has already been applied for) is obtained. The making of the Offer is conditional upon obtaining certain exemptions from the Takeovers Code.

Price - Full and Fair
The Board believes $1.85 per share represents a full and fair price for Tenon shares, for the following reasons:

It is higher than any price Tenon has traded at in the last two years (even adjusting for share consolidations)
It is above the brokers' average valuation of approximately $1.70 per share
It is in the middle of the Tenon value range of $1.75 - $1.95 per share that was referenced by the Chairman of Tenon in his letter to shareholders included in the company's January 2004 Explanatory Information Memorandum and also by the company's CEO in a presentation to institutional investors on 18 March 2004.
Moreover, the cash price would provide Tenon shareholders with the full value today (and with certainty) of Tenon's planned $1.15 per share second capital return, as well as 70 cents per share of value for Tenon's residual processing and distribution assets - i.e. a 19% premium to their implied share market value (based on the weighted average Tenon share price in trading on the NZX over the period from the announcement of the Tarawera forestry right sale up until the day the Takeover Notice was issued).

The Board is aware that there has been considerable speculation recently regarding the potential for a takeover of Tenon, and that this speculation has driven the Tenon share price up above most broker valuations. Although several names (other than Rubicon) have been raised in both media and analyst reports, to date there has been no apparent substance to such rumours. As the 19.997% cornerstone shareholder in Tenon, it would be natural for such parties to approach Rubicon in relation to our shareholding were they interested in making a move on the company. Despite having a strategic stake in Tenon, we have had no approaches from the supposedly interested parties - either directly or through intermediaries - which suggests the speculation may be nothing more than speculation.

Tenon Risks
It should be noted that there is still considerable uncertainty surrounding Tenon's valuation and future share price.

Tenon is only partway through the divestment of its forest estate for a total of $725 million. While the freehold portion of its estate has been sold and the cash consideration settled, leasehold interests representing $170 million in total have not yet been settled as they require the consent of the lessors and those consents have yet to be obtained. Settlement of the recently announced Tarawera forestry right sale for $165 million is still subject to the buyer satisfying its own financing conditions.

In addition to the uncertainties surrounding the current forest sales activities, there are also business risks relating to Tenon moving forward. These include the cyclicality of the company's earnings and the impact of the US dollar on Tenon's 2005 forecast earnings (assumed to average 60 cents in the forecasts included in the January Information memorandum).

Benefits to Rubicon and Tenon shareholders
The Board has considered the best use of Rubicon's current cash balance. Whilst one of the a

[ari]

I've just taken some more time to read between the lines....what a bunch of jerks...I'm embarrassed to own Rubicon as well!
Fair and reasonable at $1.85.....YEAH RIGHT [V]

[biker]

"Rubicon has the capability, skills and knowledge to drive value in Tenon. Its Board and management have a broad range of restructuring and operational skills, as well as extensive knowledge.........."


Yeah right! I would say the Rubicon Board and management(excluding Gibbs and Weiss) have a very narrow range of restructuring skills and no operational skills.What have they done? Flogged off some assets they were given, engaged in a hasty,expensive, ill-timed buyback,attempted to screw the FFS shareholders in the Citic fiasco and been acomplices in the Perry Corporation con job.
Who wrote that Company piece? Mickey Mouse Andrews or Motor-Mouth Moriarty?
What a load of crap.

[willy_wonker]

I agree with your comments Biker. But dont give up yet shareholders, $1.85 is only the beginning of an interesting ride for us. This puppy is worth over $2.00. I am NOT gonna sell to RBC.

[peterafaj]

There is no way that I will sell to RBC

They have nothing to offer and $1.85 is a joke.

When they put up $2.50 , I might have to reconsider

Cheers

Peter

[coge]

Aside from any other consideration this offer could not be more ineptly timed.

[ari]

quote:When they put up $2.50 , I might have to reconsider

.......getting warmer

quote:Aside from any other consideration this offer could not be more ineptly timed.

......Oh, how very true[]

quote:Under the Takeovers Code, the Offer cannot actually be made to Tenon shareholders until 14 days after the issuance of a Takeover Notice i.e. April 22.

....what an exciting few days ahead

[willy_wonker]

quote:Originally posted by peterafaj

They have nothing to offer and $1.85 is a joke.

When they put up $2.50 , I might have to reconsider

Cheers

Peter

I agree $1.85 is a total joke. But $2.50 is abit too far from reality. I would say between $2.00 - $2.10 is a realistic price. It all depends who else comes to play in the takeover game.

Fancy trying to take out a company at a discount when there is a profit forecast upgrade of 30%.

[ari]

With the recent merging of Rubicon/CAH forestry biotechnology and propagation ops, I wonder who is the real 'nigger'(sorry not PC) in the wood pile[?]

[Anna Naum]

The RBC statement is interesting and I think reveals the real reason for the bid at such a pathetic premium to the share price...

Although several names (other than Rubicon) have been raised in both media and analyst reports, to date there has been no apparent substance to such rumours. As the 19.997% cornerstone shareholder in Tenon, it would be natural for such parties to approach Rubicon in relation to our shareholding were they interested in making a move on the company

I think RBC wants to sell its stake in TEN, but because of the size of its stake needs someone to bid for the whole company.

This is a claytons bid, there is no way they will win control and thus under NZX listing rules it will cost them next to nothing to try and flush another buyer out of the woods ... come on in CAH