ArborGen Transfer Issue Raised
ArborGen Transfer Issue Raised Under GPG Partial Takeover Offer for Rubicon
The Independent Directors of Rubicon Limited (Rubicon) today announced that they have notified GPG Forests Limited (GPG) that Rubicon has been advised by the ArborGen partners, that their legal advice is, that a change of control of Rubicon resulting from a successful GPG partial takeover Offer, would require the partners’ consent in relation to the ArborGen joint venture. The current partners in ArborGen are Rubicon Industries USA (31.67%), International Paper Company (31.67%), MeadWestvaco Corporation (31.67%), and Genesis Research and Development (5%). The partners have indicated that the giving of that consent would depend, amongst other things, upon the willingness of GPG to allow Rubicon to meet the remaining ArborGen 5-year funding requirements. If consent is not given by a majority of the non-Rubicon ArborGen partners, then those partners may take the view that a breach of the ArborGen agreement has occurred and seek to expel Rubicon from the partnership.
Mr Michael Andrews, the Chairman of Rubicon said “Rubicon has previously received legal advice on this issue. Rubicon’s view is that the partners’ consent to a transfer of the ArborGen interest is not required for a change of control in Rubicon, but it is clear that the ArborGen partners are taking a different view. Given that one of the conditions of the GPG partial Offer for Rubicon is, in effect, that there are no prejudicial change of control issues arising out of the Offer, we have alerted GPG to this new issue and will be discussing with them how they wish to proceed.
The relevance to Rubicon shareholders is, of course, that GPG’s Offer for Rubicon shares is only a partial one, to gain a 50% control position only. This means that if the GPG offer were successful, shareholders may be left holding 60% of their current shareholding in Rubicon, in a situation where the ArborGen partners may refuse to consent to the change of control of Rubicon Industries USA’s interest in ArborGen upon the change of control in Rubicon to GPG. As Grant Samuel & Associates valued ArborGen at between $49 million to $98 million, or 18 to 35 cents per Rubicon share, this is a highly material issue that needs to be addressed by GPG. We hope to work with them to resolve this issue for shareholders.” he said.