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Evergreen Buyers Line Up; BATTLE FOR THE TREES

Posted on: Wednesday, 7 September 2005, 15:00 CDT

Whether the New Zealand Superannuation Fund's first investment in New Zealand forests proceeds will be decided largely by money managers for Danish engineers and teachers, Ohio state employees and rich United States individuals.

Evergreen Forest shareholders will meet on September 26 to decide whether forests should be sold to Australia's James Fielding Funds Management for $104.2 million, to the New Zealand Superannuation Fund (NZSF) for $112m or kept.

Evergreen listed a decade ago as a forest investment for New Zealand's sharemarket.

National Party leader Don Brash owns 0.19 per cent of the company's ordinary shares and, although there are other New Zealand shareholders, the firm has largely been spurned by local investors.

The Ohio Public Employees Retirement System (Opers) owns 40% of the ordinary shares. A wealthy US family, the Douglas family, owns 11.32%, a Danish pension fund for teachers owns 9.15% and a Danish pension fund for engineers owns 9.15%.

Shareholders had three options, chairman Peter Wilson said. A sale of assets to either Fielding or NZSF, or they could decide not to sell.

If they did not sell, Evergreen would seek to raise money in a rights issue.

Wilson said he had no idea whether the bidders would raise their offers. The board had created a process for each of the bidders to have their offers considered.

Fielding was examining its options, a spokesman said. He declined to comment on whether the bid would be raised or not.

If all of the forests are sold Evergreen is likely to be wound up or become a backdoor listing for someone else. The market's only specialised forest ownership company will be gone.

Evergreen's board would issue a notice of meeting in about a week identifying issues for shareholders, but it was unlikely to make a recommendation because it was an asset sale, rather than an offer for shares, Wilson said.

Shareholders must vote 75% in favour of the sale.

Opers is advised by Global Forest Partners, a timber management organisation that manages forest investments in New Zealand and elsewhere, and it is not commenting on the investment.

The investment will be the first in New Zealand forestry by the NZSF, which was set up to provide funding for the New Zealand Government's future superannuation liabilities.

NZSF chief executive Paul Costello said the intention was have anywhere between zero and 5% of the fund invested in forestry by the end of 2007. If it achieved 2% roughly $240m would be invested in the asset class.

However, the fund would not be driven by targets and it was considering forest investments around the world. The forest investment forms part of the alternative investment class which the fund has said it is increasing allocations to. The fund is using Boston-based international forestry consultant as an adviser.

If the Superfund succeeds in buying Evergreen's forests, they will be managed by GMO Renewable Resources, the timber management organisation which advised Harvard University's endowment fund on its investment in the Kaingaroa forest.

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BATTLE FOR THE TREES

The New Zealand Superannuation Fund is bidding for Evergreen's forests making a higher offer than an earlier bid from Australian fund manager James Fielding.

Land & Forest Holdings as at June ,30 2004, in hectares.

net stocked area.

Northland...........................................5949

South Auckland...............................2898

East Coast NI...................................9290

South Island........................................143

Total owned...................................18,280

Forestry rights SI..............................1182

Area awaiting replanting..................780

Total area........................................20,242

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Map marking area.

Source: Evergreen Forests Ltd.

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Source: Press, The; Christchurch, New Zealand

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