Smart Hart shows how to walk on water
It was an amazing week for the NZX. Vector listed on Monday at a big premium to its $2.38 issue price and then, on Wednesday, came a huge surprise: a small company called Rank Group made a $3.27 billion bid for Carter Holt Harvey after agreeing to buy International Paper's 50.5 per cent stake at $2.50 a share.
Tuesday, August 23rd 2005, 8:16AM
by The Landlord
Graeme Hart owns all 6.4 million Rank Group shares and is the company's only director.The banks must have huge confidence in Hart to be prepared to lend him most of the $3.27 billion. To offer that amount, without requiring him to do due diligence indicates they believe he walks on water.
Hart does walk on water in the sense that he is substantially bigger in New Zealand than Bill Gates is in the United States.
Hart's $3.27 billion Carter Holt bid represents 5 per cent of the market's total value of $65 billion. Even if he buys only half of the forestry giant, which is more than likely, his purchase price will be 2.5 per cent of the market's total value.
By comparison, Gates 1.02 billion Microsoft shares are worth US$27.4 billion ($39.32 billion) or just 0.17 per cent of the total value of the New York and Nasdaq stock exchanges.
NZX investors should have as much confidence in Hart as the banks, because his only other domestic listed company was a huge success.
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