Chairman Kerry Hoggard says the change was the best way to restore value for the shareholders in the group’s four divisions.

“It is clear that the group’s capital structure is seen as complex by investors, is perceived to raise governance issues, and has resulted in a significant structural discount being applied to all our stocks,” he says. “We cannot allow this to continue, and will move as quickly as possible to a full dismantling of the targeted share structure.

“Shareholder consent in all stocks will be required to implement the necessary resolutions.”

Hoggard says the timing of the programme to dismantle the targeted shares would be determined by shareholder value, but the board believed a completion date of December 2000 was achievable. “We will use every endeavour to bring this forward. Our intention is that this timeline will be extended only if shareholder value issues demand it.”

A significant factor in the timing would be the requirement to restructure corporate funding, taxation and other arrangements in ways that maximise shareholder value. Organisational structures appropriate for each entity would be implemented in the same timeframe, resulting in a significant downsizing of the corporate centre.

The targeted shares structure was established in 1993 with the formation of the Forests Division, and expanded to include the Building, Energy and Paper Divisions in 1996. Each Division has been represented by its own targeted shares listed on the New Zealand, Australian and New York stock exchanges.