Carter Holt IPO shelved

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UPDATE: The potential float of NBR Rich Lister Graeme Hart’s Carter Holt Harvey has been shelved pending greater certainty in the Australian timber market.

The move was confirmed in a media statement this morning.

Changes in market conditions in recent weeks introduced a level of uncertainty to the earnings outlook of the Australian timber business, the company said.

“The new board of Carter Holt Harvey Group, in conjunction with the group’s advisers, determined they were unable to finalise the forecasts in the IPO offer document given the necessary level of confidence required as to the forecasts’ accuracy and probability of being achieved. Accordingly until these circumstances become clearer the IPO of the Carter Holt Harvey Group has been put on hold."

The statement quoted Carter Holt chief executive Prafull Kesha saying the decision had the full support of current owner Rank Group.

“While we were excited about the prospect of an IPO, it is the right decision in the circumstances to exercise caution and pause,” he said.

The presence of cheaper timber imports in the market is said to have affected the company’s confidence in its price forecasts.

Carter Holt confirmed in May that an initial public share offer was being considered and a prospectus had been expected to be published this month.

It is understood the process has now been delayed indefinitely, possibly to early next year.

Confirmation of the delay arrived as The Australian reported that ASX listed conglomerate Wesfarmers, owner of the Bunnings retail chain, was interested in Carter Holt’s building products chain Carters.

The newspaper speculated that the IPO was being delayed pending the outcome of talks about a possible deal.

However, others see a Wesfarmers link as a red herring.

While there is superficial logic to such a tie-up, a New Zealand source says institutional investors on both sides of the Tasman were wary of buying Carter Holt from Mr Hart after their experience with Goodman Fielder, “so he throws around a few names and lets people think he’s pulled back on it because there’s some trade interest out there talking to him. Just keep it bubbling along so he can live to fight another day.”

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