Rubicon key conditions satisfied

31 May 2004

Rubicon Forests Limited (“Rubicon”) today announced that it had received formal advice from Tenon’s banking syndicate, that the syndicate would continue to fund Tenon under its existing facility (and on the same terms and conditions) upon Rubicon moving to a 50.01% ownership position. Rubicon said, “We are naturally pleased that Tenon’s banks are willing to show support for Rubicon in this manner.”

Rubicon also announced today that it had waived its Offer condition that an independent expert review and confirm that there are no ‘change of control’ clauses in Tenon’s contracts which would have an adverse impact on Tenon under a change of control to Rubicon.

The Company said, “This means that key conditions of the Offer are now satisfied – OIC approval (obtained), Tenon bank syndicate approval (obtained), and ‘change of control’ review (waived). We now need to achieve acceptances that will move us to 50.01%, and we are confident we will achieve these. We are receiving strong support from both institutional and retail shareholders. Over 4,000 small shareholders in Tenon have accepted our brokerage-free Offer so far, and we expect many more to do so prior to the Offer closing at 5pm this Thursday, 3 June.”

Institutional and retail shareholders are coming to the view that as no other offers for Tenon have emerged, in the absence of Rubicon’s offer the Tenon share price will fall. To this point, Tenon’s Independent Advisor (Grant Samuel) said, “In the absence of actual and potential takeover speculation, the Tenon share price is likely to be lower than the current share price.” And in a surprising admission, even Tenon’s independent directors and management only this weekend stated,

“Tenon’s share price may weaken – whatever the outcome of the Rubicon offer.” If these statements made by Tenon and its advisor are correct, it would be perfectly logical for Tenon shareholders to sell into the Rubicon Offer. Tenon shareholders who are not committed long-term holders should avail themselves of a brokerage-free opportunity to exit shares at a higher price than might otherwise be the case in the absence of our Offer.

And even those holders who wish to be longterm Tenon shareholders, would be better off by selling into Rubicon’s Offer at $1.95 per share and then buying back in later at a lower price after the Offer closes.”

ENDS

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