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


Tenon to return $100mn to shareholders if US sale goes ahead

Friday 14 October 2016 10:42 AM

Tenon applies to return $100mn to shareholders if US sale goes ahead

By Sophie Boot

Oct. 14 (BusinessDesk) - Taupo-based wood processor Tenon has applied to the High Court for orders to seek shareholder approval to return $100 million in capital through a share cancellation, as part of Blue Wolf Capital's potential acquisition of its US business.

The US$110 million offer from the New York-based private equity firm is pending shareholder approval at the company's annual meeting on Nov. 18. Full details of the proposed sale and capital return and an independent report from Grant Samuel will be distributed to shareholders early next month.

"Given the change in the scale of Tenon’s ongoing business and our lesser ongoing capital requirements post the sale, the net sale proceeds (after repayment of all Tenon debt) is surplus capital, and the board is seeking to return that to Tenon shareholders," chair Luke Moriarty said.

An initial Grant Samuel valuation put the value of Tenon's North American operations at between US$108 million and US$129.5 million, making the offer from Brooklyn-headquartered Blue Wolf at the low end of the valuation range for an offer which stemmed from a strategic review of the company's fortunes initiated last August.

The company wants to cancel half its shares and pay the New Zealand dollar equivalent of US$2.20 for every share cancelled, equivalent to US$1.10 for every share held before cancellation. This would amount to US$71.3 million, or about NZ$100 million, in capital returned.

If shareholders, the largest of which is forestry bio-tech company Rubicon, vote in favour of the sale to Blue Wolf, that would be completed by Nov. 30 New York time, and the capital return payment would be made in late December, Moriarty said.

Tenon, which reports in New Zealand dollars, flagged the possible capital return in its annual earnings announcement in August. It reported net profit after tax, before a $31 million writedown in the carrying value of assets and $3 million in strategic review costs, at $21 million for the year to June 30.

Earnings before interest, tax, depreciation and amortisation doubled to $26 million before the costs noted above and a further $3 million of restructuring and impairment costs, $2 million of which related to Woolworths Australia closing its home improvements chain.

The shares last traded at $2.52, and have dropped 10 percent this year.



© Scoop Media

Business Headlines | Sci-Tech Headlines


RNZ: Porirua Most Expensive Region To Rent, According To Trade Me

A rental website shows this town is now New Zealand's most expensive region to rent a house, ahead of Wellington and Auckland cities. More>>


Stats NZ: Nearly 1,000 More Big Businesses Now Than Two Decades Ago – Media Release

There are now 2,690 big businesses in New Zealand employing more than 100 staff – nearly 1,000 or 58 percent more than 20 years ago, Stats NZ said today. Over the 20 years to February 2020, the total number of enterprises in New Zealand increased ... More>>


RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


CERT NZ: Malicious Computer Virus Targeting New Zealanders

CERT NZ, the government agency which supports organisations and individuals affected by cyber security incidents, says a recent surge of increasingly sophisticated malware attacks is affecting everyday New Zealanders as well as large organisations. The ... More>>


Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>