The media frenzy that resulted from Bank of America’s (B of A) inadvertently breaching the reportable 5% threshold limit for an interest in a listed company was embarrassing.
The idea that somehow B of A was interested in taking over Gunns was suggested by some.
Merrill Lynch has always been a Gunns shareholder. It was taken over by B of A following the GFC. Its % holding was 3.3% at 31st August 2009. This inadvertently crept up a bit and a Substantial Shareholder notice was required. By B of A.
No big deal.
But as soon as they realised they sold their shareholding to fall below the limit.
Trusting the headlines in The Examiner and The Mercury will show:
B OF A ABANDONS GUNNS AFTER DUE DILIGENCE
DJ Gunns Idles Woodchip Mills; Wants To Reduce Inventory
14/05/2010 11:08AM AEST
CANBERRA (Dow Jones)–Forestry concern Gunns Ltd. (GNS.AU), a major Australian woodchip exporter, is to idle each of its three mills for two or three weeks to reduce inventory levels, company spokesman Matthew Horan said Friday.
One mill has already ceased operation, which has also allowed the company to replace its main chipper, while the other two mills will be idled from the end of the month, he told Dow Jones Newswires.
“It’s inventory management basically” and while the company would prefer not to stop production, there is plenty of inventory to meet short term demand, Horan said.
The temporary halting of production isn’t material information for the share market, he added.
Japan is by far the biggest export market for Australian woodchips but demand fell sharply in 2009 under the influence of the global financial crisis, the government’s Australian Bureau of Agricultural and Resource Economics reported previously.
Australian hardwood chip exports fell 37% to 1.82 million metric tons in the first half of 2009 from 2.50 million tons in the second half of 2008, according to Abare.
Of hardwood chips exported in the first half of 2009, Abare said that 71% were destined for Japan, down from 87% in the 2008 second half.
By Ray Brindal, Dow Jones Newswires; 612 62080902; firstname.lastname@example.org