My theory (they are generally wrong, but eventually I'll be right one day :-) is that GNS and UPM have had a deal in place for a while (I don't think for one minute GNS have really 'gone it alone' with the start of earthworks). It was conditional on GNS getting rid of the baggage of Tasmanian native forest issue (at the expense of everyone else mind you). That's being ticked off now. The delay in finalising an announcement has been due, as much as anything else, to the time differences between AEST and Finland
As part of the deal, I reckon UPM, or one of their "friends", will buy a significant proportion of GNS's plantations. Why? If you invest in a $2 billion pulp mill project it pays to have your foot on the wood. There's only one thing more forlorn than a pub with no beer and that's a pulp mill with no wood!
In one swoop GNS will (1) have cash to clean up its debt (and hopefully send the ANZ on it's way); and (2) have a war chest to inject, and to leverage off, into the mill project. I don't think it will be enough for GNS to hold 51% of the project, but it will put GNS on a good footing.
A merger with UPM (aka swallowed up by) by scheme of arrangement wouldn't surprise me either.
Either way, it would be a great outcome for long suffering shareholders, employees, contractors and other stakeholders, state and federal government, and regional Tasmania.
GNS Price at posting:
20.5¢ Sentiment: Hold Disclosure: Held
