Kangaroo Island Plantation Timbers directors recommend shareholders reject takeover offer

Kangaroo Island Plantation Timbers Ltd (ASX:KPT) directors have unanimously recommended shareholders to reject the on-market takeover offer from Samuel Terry Absolute Return Active Fund (STAM). STAM already holds 26.26% of KPT and has offered to acquire all KPT shares at an offer price of $1.05 cash per share. KPT chairman Paul McKenzie said the directors have recommended shareholders to reject the offer for the following reasons: the offer undervalues KPT; the timing of the offer is opportunistic; the offer does not include a premium for control; and by selling KPT shares now, shareholders will lose the opportunity to participate in KPT’s potential upside. $32 million road funding for Kangaroo Island Last week, KPT welcomed the announcement in the Federal Budget of $32 million of road funding for Kangaroo Island as the final piece of the puzzle to clear the way for approval of its proposed KI Seaport development at Smith Bay. The Federal funding has been earmarked for upgrades of two of the Island’s three arterial roads – Hog Bay Road and Playford Highway. Playford Highway is an integral part of the KPT’s route to the proposed export facility at Smith Bay. Background In December last year, KPT was asked to provide further information on three matters to the State Minister for Planning Hon. Vickie Chapman. The request included evidence of agreement about the road route to bring harvested timber from the west end of Kangaroo Island to the proposed KI Seaport on the north coast at Smith Bay. Subsequently, KPT worked closely with the Department for Infrastructure and Transport on the specific route and design of the roads and intersections. Managing Director Keith Lamb said roads and transport had been a key concern for the people of Kangaroo Island in regard to the timber industry and were raised in all three rounds of the public consultation for the project. He added: “We are pleased that the Federal and State Governments recognise the importance of this industry to Kangaroo Island and that this funding for critical infrastructure now effectively removes the last barrier to approval for the Smith Bay development. “We look forward to a timely approval from the Planning Minister and to scaling up our harvest and marketing with the certainty of a route to market.”