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Rubicon shareholders give green light for sale of Tenon

Rubicon shareholders give green light for sale of Tenon Clearwood stake

By Rebecca Howard

Jan. 12 (BusinessDesk) - Shareholders have voted in favour of Rubicon's proposal to sell a 45 percent stake in Tenon Clearwood Partnership, a large clearwood sawmill and manufacturing operation in Taupo.

The US$14.9 million purchase price - including its share of the latest reduction in the company's net debt - fell towards the middle of the Grant Samuel range, which was US$13.2 million-to-US$17.8 million and 99.9 percent of the shares voted at today's special meeting in Christchurch were in favour, the forestry biotech firm said. The transaction is expected to close Jan. 31.

In December it said the proposed buyers are Dorset Management Corp and Libra Partners NZ LLC, who will each take 20 percent, with the existing owners of the Clearwood partnership taking the remaining 4.88 percent. Dorset is affiliated with Rubicon's biggest shareholder Knott Partners, which owns 28 percent of the company, while Libra is its second-biggest investor with an 18 percent stake.

The sale will allow it to make two deferred-settlement payments for ArborGen, totalling US$15 million and which will now be Rubicon's sole asset.

"We have great belief in the potential future upside in ArborGen," chair Stephen Kasnet said at the meeting. It will also put the company in a position to achieve significant cost savings, he said. Rubicon took full ownership of ArborGen in June, after buying out its partners for US$29 million.

"We believe that these three factors – the removal of any overhang in the stock price relating to uncertainty as to funding source of the deferred ArborGen acquisition and subordinated debt payments, simplifying Rubicon to be a pure-play on the ArborGen business, and the achievement of cost savings, will all be beneficial to building positive momentum in the RBC share price," he said prior to the vote.

ArborGen is a global leader in advanced forestry genetics and has a pre-eminent intellectually property position with a portfolio of advanced products that do not require regulatory approval, he said.

Rubicon's shares last traded at 23.5 cents and are down 9.6 percent over the past 12 months.

(BusinessDesk)

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