Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Company To Progress Kiwi Forest Group Offer

Company To Progress Kiwi Forest Group Offer

Auckland – Fletcher Challenge Forests announced today that it has negotiated a variation to the Letter of Intent entered into with The Campbell Group on 15 September 2003 that will enable the Company to immediately enter into negotiations with the Kiwi Forests Group (which has made a competing NZ$725 million cash offer). It also allows negotiations with The Campbell Group on its offer of NZ $685 million for the forest assets to resume, in the event that a transaction does not proceed with the Kiwi Forests Group.

The Company has been released from the exclusivity provision in the Letter of Intent in relation to the Kiwi Forests Group offer and, in return, will make a payment to The Campbell Group of NZ$8.5million. This represents 50% of the NZ$17 million break fee payable under the original Letter of Intent in the event the Company elected to enter into discussions with a competing bidder for its forests. The maximum liability for such break fees under the Letter of Intent remains capped at NZ$17 million.

Should the Company conclude an unconditional sale and purchase agreement with the Kiwi Forests Group, the Company will pay The Campbell Group a further $8.5 million, being the balance of the NZ$17 million break fee referred to above. However, should The Campbell Group be successful in purchasing the forest assets, the $8.5 million payment will be refunded to the Company by The Campbell Group.

Referring to this arrangement, Joint Chief Executive Officer John Dell said “The variation to the Letter of Intent represents a good outcome for the Company, as we improve prospects for completion by gaining the ability to deal with two potential buyers for our forests.”

“If the Kiwi Forests Group offer is successful, the NZ$725 million sale price more than compensates the Company for the full break fee the Company would have to pay to The Campbell Group. On the other hand, if The Campbell Group is successful, the Company will not have incurred any additional cost,” he said.

Both the Kiwi Forests Group and The Campbell Group offers are currently subject to a number of conditions (including due diligence) and ongoing business arrangements, including the agreement of wood supply arrangements. The Board will be seeking to ensure that all substantial conditionality is removed from any offer before it makes a final recommendation to shareholders.

The Company will update the market in relation to the timetable for completion of the forest sale process as soon as it is in a position to do so.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Department Of Conservation: Beech Mast On The Cards After Warm Summer

Climate modelling shows this year’s hot March has increased the chance of beech forest seeding next summer in parts of New Zealand, which could be bad news for native wildlife. The Department of Conservation (DOC) uses data from NIWA’s virtual climate ... More>>

Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on seek.co.nz. Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Geo40: Global Plans To Recover Low-Carbon Lithium At Scale Accelerated By Investment Of Up To $7.5m By Pacific Channel

New Zealand’s leading sustainable, mineral-recovery company, Geo40 Limited has secured up to $7.5m in equity investment from New Zealand deep-tech specialist Venture Capital firm Pacific Channel to fast-track plans to develop its nascent lithium-from-geothermal-fluid ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>