Australian timber company Gunns halts trading pending acquisition talks outcome
29 Aug 2009
Tasmanian timber company Gunns has gone into a trading halt pending an announcement on an acquisition and release of its 2008-08 results. The company said it was in dialogue with a party over a possible acquisition that may culminate in an agreement.
Details are expected to be announced when the company releases its results on Monday.
Speculation has been rife about the company making a full takeover bid for fellow Tasmanian company Forest Enterprises Australia (FEA), or Gunns' possible acquisition of the hardwood plantation assets of failed companies Timbercorp and Great Southern.
Gunns acquired a 17.9 per cent stake in FEA last month in recognition of the strategic importance to the forest industry of further consolidation.
FEA operates a timber mill at Bell Bay in northern Tasmania which processes plantation hardwood and softwood and is the state's second-biggest timber company after Gunns.
FEA's largest shareholder with 31 per cent is ITC, a division of Elders. ITC.
is a significant player in the forestry space and has been selling assets to reduce debt. Elders' exposure to managed investment schemes through FEA has been a drag on earnings. Both Elders and FEA will release their results on Monday.
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