City Forests Ltd. On Opio FF Takeover Offer

Tuesday, 5 October 2004, 2:18 pm
Press Release: City Forests Limited

CITY FORESTS LIMITED

4 October 2004: City Forests Limited advises today that it will not extend its 85c per unit cash offer for all the units in Opio Forestry Fund beyond 8 October 2004.

City Forests’ chief executive Mr Phil Taylor said: “That while we have the option to extend, it is in the interests of all unitholders to bring a speedy conclusion to our offer.

“Despite encountering considerable frustration since launching our offer on 3 August 2004, we have had a very favourable response from those unitholders who we have been able to identify and contact directly. Indeed eight out of the top 10 unitholders have accepted our offer.

“We have also had initial discussions with Opio’s largest unitholder, the US investor Lionel Hastings Revocable Trust which has 19.4% of Opio. We are very hopeful of a positive outcome.”

City Forests currently has acceptances for 6,316,222 units in Opio representing 42.2% of the total units on issue. “Under the circumstances we are very pleased with our progress. Given the normal pattern of takeovers, we would expect increased activity in the last week of our offer.

The offer is conditional on City Forests receiving acceptances for 75% of the units in Opio.

“We believe it is highly likely that the Opio unit price will trade back to historic levels should our offer not be successful,” Mr Taylor said. “Opio’s unit price has traded within the range of 44-60 cents over the last three years. There is also no certainty that the market price of Opio units will increase as the forest approaches harvest.

“Furthermore, since we made our offer in early August, there has been an appreciation of the New Zealand currency against the United States dollar. This continues to negatively impact the value of Opio’s forest crop.

“We therefore remain of the view that our 85c per unit cash offer is a full and fair price.”

End.

Forsyth Barr is advising City Forests on the takeover.

Details on City Forests are available on its website:
www.cityforests.co.nz

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