Shares in Gunns plunge to 26.5 centsBY ZOE EDWARDS-- Examiner26...

Shares in Gunns plunge to 26.5 cents
BY ZOE EDWARDS-- Examiner
26 May, 2010 12:00 AM
GUNNS Ltd boss Greg L'Estrange last night had no explanation as to why the company's share price continued to plummet despite making a raft of "positive" announcements to the Australian Securities Exchange.
Gunns shares plunged by almost 25 per cent yesterday to another record low, closing at just 26.5 cents - down 8.5 cents a share after opening the day at 34 cents.


The fall came at the same time as the timber giant told the ASX it had set its 2010 Japanese woodchip price at $189.50 a tonne - just $1 less than last year - and a day after the company revealed it had sold its retail hardware stores for $40million.


Gunns also told the ASX yesterday that its major Japanese customers had won preliminary approval from the Forest Stewardship Council for some of the company's woodchips.


Mr L'Estrange said the "preliminary step" demonstrated the company was intent on restructuring the company and the way it conducted business.


He said the company was an attractive investment option.


"This is not a process that can be measured in days, all I can say is that we will get on with the process of reshaping the business and developing our base business."


More than 40million, or around 5 per cent, of the timber giant's shares changed hands yesterday.


Financial analyst Tony Gray said it was clear that a substantial shareholder had opted to sell out of the business.


But Mr Gray said the woodchip announcement would not have been a contributing factor.


"The sharemarket opened lower and continued to fall before the announcement was made" Mr Gray said.


"It seems clear that the decision (to get out of the business) had already been made."


Mr Gray said the share price would lift if Gunns announced the volume of woodchips it planned to sell.