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Tenon has another buy in wings

NZ Newswire logoNZ Newswire 22/12/2016 Paul McBeth

Wood products company Tenon, which sold its US operations for $US110 million ($NZ159m), is in exclusive talks with a potential buyer of its remaining New Zealand assets, which would see the former Fletcher Challenge entity wound up.

The company on Friday distributed $US71m to shareholders, cancelling one out of every two shares held and returning $2.20 per cancelled share, and has entered exclusive talks with one party with the goal of signing a sale and purchase agreement for its Clearwood New Zealand business, it said in a statement.

If a deal is signed, surplus cash would be returned to shareholders and the company liquidated at an estimated cost of $US8m.

"The proposal is conditional upon a number of items (including Tenon shareholder and court approvals) which Tenon is currently assessing," it said.

"Grant Samuel will be asked to prepare an updated independent report to Tenon shareholders once final agreement has been reached."

The New Zealand business was valued at between $US63.3m and $US74.1m in independent adviser Grant Samuel's report on the US transaction.

Its sales rose 5 per cent to $US81m in the year ended June 30 while earnings before interest, tax, depreciation and amortisation more than doubled to $US12m.

Tenon said the Grant Samuel report will update the "average adverse currency movements" among other things.

Separately, Tenon said Rodger Fisher would leave the board at the end of the year and will be replaced by Wood Engineering Technology director Stephen Walker.

Tenon shares last traded at $2.20.

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