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Forests Change Hands, Again

Posted on: Thursday, 14 July 2005, 18:00 CDT

Parts of the Fletcher Challenge forest estate broken up in a sale last year are together again care of merger and acquisition activity among global forest management organisations.

Hancock Timber Resource Group is buying Prudential Timber Investments for an undisclosed sum, increasing its assets under management globally by 25 per cent and more than doubling its forests under management in New Zealand.

Hancock is the largest of the timber management organisations, known as Timos, which have been buying forests around the world on behalf of institutional and other investors. It manages $US3.1 billion worth of forests.

Hancock was a potential buyer of the Central North Island Forest Partnership estate in the central North Island, eventually bought by the endowment fund of Harvard University for between $600 million and $650m.

Hancock eventually made its first purchase in New Zealand in the carve up of the Fletcher estate, ending up with 40,000ha of cutting rights to forests regarded as the jewels in the crown of the Fletcher forest portfolio.

PruTimber, which was owned by United States-based Prudential Financial Inc, bought rights to 65,000ha of former Fletcher forests through the vehicle Viking Timber and it uses PF Olsen as forest manager.

Hancock will now oversee 105,000ha of forests in New Zealand. Hancock uses its own property management arm as forest manager but said yesterday it would honour contracts PruTimber has.

"It's business as usual," said Hancock's Australian-based executive Bruce McKnight. The purchase of PruTimber is not expected to complete until the third quarter.

The Tiaki Plantations Company, Hancock's New Zealand holding company, announced in January its forests had received Forest Stewardship Council standard, an international standard desired by buyers concerned about the environment sustainability of wood products.

"We believe good stewardship is good business," said Dan Christensen, Hancock's president.

Hancock's ultimate parent is Canada's Manulife Financial Corporation.

Hancock also owns forests in Australia. It is believed to be out of the running for non-core forests currently being marketed by Carter Holt Harvey.

Source: Press, The; Christchurch, New Zealand

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