TENON

[peterafaj]

Hi Willy Wonker

$2.50...Too Far from Reality !!! On what basis ???

Check the other Tenon tread. Brett Wilkinson values Tenon at 2.11 and this was before the profit upgrade.

No-one really knows the real value, except probably RBC , who are doing a real sucker job of grabbing TENON before the fair value can be established. Just review the establishment of RBC itself. Brian Gaynor wrote it up as almost corrupt in that they transferred assetts at book value into RBC out of FCL and basically ripped off FCL shareholders and within a few months sold these assetts at "Market value", to the benefit of the Directors and RBC shareholders. Would you trust them today ????

Cheers

Peter

[willy_wonker]

Who is this Brett Wilkinson character that is regularly mention on this site? Can someone give me his website link? Is he an analyst?

At $2.00 TEN will be at a PE 9x approx. after increase profit forecast, which I think is fair value.

[Unicorn]

URL for Brett's site is www.shares.net.nz

[ari]

As the NZHerald says....."TENON is actually funding its own predator; because the second return of capital it will make to shareholders from its forest sale will give Rubicon $160 million to pay off any bridging loan plus money left over."

This has to be a first............[?]

[ari]

An interesting week ahead of us
Rubicon: let rivals step up
11 April 2004

Either way, Tenon shareholders face a brighter future after a decade of disappointment, writes GARRY SHEERAN.


Counterbids to Rubicon's left-field lunge for forest products group Tenon may spell more good news yet for long-suffering shareholders in the former Fletcher company.

But Rubicon director Tony Gibbs denies the $1.85-a-share bid for 50.01% of Tenon is designed to flush out rival suitors.

"If there are other bidders out there, well, let them come. We'll deal with that situation if it occurs," said Gibbs, whose company Guinness Peat Group owns 20% of investment vehicle Rubicon.

"But logic tells me there are not (other bidders)," he said.

Despite rumours in recent months, no potential buyer of Tenon had approached Rubicon, as Tenon's cornerstone shareholder, said Gibbs.

He said Rubicon saw its role as a long-term value investor in Tenon.

The $1.85 Rubicon offer is only slightly ahead of the $1.82 share price as markets closed on Thursday for the Easter break.

But it is a long way ahead of the $1.30 range of less than a month ago.

Much of that increase has been fuelled by Tenon takeover rumours, with Carter Holt Harvey and Fletcher Building two names mentioned.

Macquaries Equities investment director Arthur Lim said either company buying Tenon could make big savings through synergies not available to Rubicon.

"And that would allow them to bid significantly higher than $1.85," he said.

But while many competitors wanted Tenon's wood-processing assets, they were not so keen on buying Tenon, the company.

"There are worries about contingent liabilities and existing supply contracts."

But if rival suitors did not emerge, Rubicon's intended involvement in Tenon as controlling shareholder still held good prospects for the company and shareholders, said Lim.

GPG and Perry Corp (which also owns 20% of Rubicon) were both significant investors with deep pockets.

If the bid were successful, the company would also have $100 million in cash after a capital repayment in October, putting it in a powerful position to drive value for shareholders, said Lim.

Tenon has advised its shareholders to take no action meanwhile. An independent report will be critical in helping investors decide what to do.

Initial reaction to the $1.85 offer price has been favourable. Rubicon said the offer price was higher than any price Tenon had traded at in the past two years and was also above brokers' average valuation of about $1.70 a share.

Investors who bought into Fletcher Forests at around $1 a year or so back will find the offer tempting. Not so those who paid $3.50 when Fletcher Forests was spun out of the Fletcher Challenge empire.

Gibbs said many Tenon (formerly Fletcher Forests) shareholders had had a pretty miserable 10 years.

"Rubicon's bid for 50% of Tenon will allow shareholders to sell 50% of their stake and hold on to 50% for the ride," he said.

Critical to the success of the offer will be how institutions respond.

Some local institutions have been reported as buying Tenon shares "with ears pinned back" in recent weeks.

AMP is understood to have recently built a 6% stake in Tenon. The offer represents an opportunity for quick profits.

Overseas institutional investors who also stand to make handsome currency gains may also be eager sellers.

[tsb]

there again it hasn't done the Rubi-con share price any harm - might just log in a an 81c buy!!

[peterafaj]

Willy Wonker

Looks like you will have to revise your TENON valuation

Sir Dryden Spring report in this morning's Herald give share valuation in $2.06 to $2.32

Sharemarket action might be interesting today !!

Cheers

Peter

[willy_wonker]

Peter, thanks for the info. I just read the article. It is much high than I expected. As a shareholder, I am "over the moon". Anyway, RBC is abit cheeky coming in with such a low offer. What is more interesting is, are there are other predictors out there waiting to pounce on TEN?

http://www.nzherald.co.nz/business/b...tickercode=TEN

[cazzer]

Before the profit upgrade, one would have said the offer was reasonable at $1.55 (in pre-capital reconstruction terms), especially as it was languishing at $1.30 not many weeks before. The directors put this valuation on the company and that was in their presentation only a few weeks ago, I believe. All of a sudden, Tenon finds the outlook far more rosier and wants to tell shareholders all about it.

Timing is everything. $1.85 does not look attractive today, whereas it did a few weeks ago. Rubicon's strategy makes sense- it either gets control of the company at a cheap price, or it flushes out a competing bid (and also wins by selling its stake). Rubicon, which once stated that its aim was to divest of its FFS stake, and has no raison d'etre, now wants to control FFS. Rubicon should now read GPG.


But as a Tenon shareholder (avg price of $1.19) its not a bad thing. Someone will takeover the new Tenon, its a question of time and price. Timing is everything- hang in there, the fun has just started.

[cazzer]

below extract of Rubicon's notice- it does seem strange that Tenon directors valued the company as such on 18 March, and now say it is worth a lot more- what has changed in a few weeks?? It looks more like Tenon were sitting on the profit upgrade news and only revealed it as a defence.

"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."