City Forests Limited

Tue, 21 Sep 2004

City Forests Limited

21 September 2004: City Forests Limited welcomes the move by the NZX to review the exemption that shelters listed Group Investment Funds, such as Opio Forestry Fund, from rigorous disclosure obligations.

The review may prompt the NZX to refer the appropriateness of the exemption to the Securities Commission.

Any changes, however, will come too late for City Forests, which has experienced considerable frustration since launching its 85c a unit takeover offer on 3 August 2004. One of the key issues currently in dispute is access to the Opio register of unitholders.

Opio's Trustee, Perpetual Trust, is denying City Forests direct access to the Opio register, an action City Forests believes is not in the best interests of unitholders.

The chief executive of City Forests, Phil Taylor, said: "We are firmly of the view that the Trustee's actions amounts to interference. Unitholders are entitled to receive the best information about the offer and the Trustee is simply standing in the way."

While this dispute continues, City Forests last week successfully removed a block that had prevented it from being able to identify those who had accepted its offer. It now has assurances from both Comptershare and the Trustee that the names of those who have accepted will be disclosed.

"Not knowing who had accepted had been a significant impediment to our takeover process," Mr Taylor said.

"So far we have received acceptances from 197 unitholders for 5,649,672 units representing 37.8% of the total units on issue. It is very encouraging that this acceptance figure includes seven out of the top 10 unitholders."

City Forests' 85c per unit cash offer is conditional on achieving at least 75% acceptance. In the event that this offer was to expire unsuccessfully on 8 October 2004 it is likely that Opio's unit price will trade back to historic levels - Opio's unit price has traded within the range of 44-60 cents over the previous three years.

ENDS

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