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Researcher backs Gunns' Great Southern proposal
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Independent research company Adviser Edge has reaffirmed its support for Gunns Ltd's proposal to take over the bulk of collapsed agribusiness company Great Southern's pulpwood project, after last week's rival bid from Black Tree Pty Ltd.

"The need for Adviser Edge to reaffirm its endorsement of Gunns' proposal was brought about by a move by rival bidder Black Tree to announce a bid on the same day Adviser Edge released its analysis of proposals by Pulpwood Plantations Pty Ltd (PPPL) and Gunns Limited," Adviser Edge said.

The research company's managing director Shane Kelly said that the company hoped to avoid confusion, and ensure that the superior proposal is identified and communicated to advisers.

"The Black Tree proposal looks to be more favourable for the 2005 to 2008 projects, but at the expense of investors in the 1999 to 2004 projects, who will be required to fund the later projects by foregoing early cash flows in return for a longer-term revenue stream," Mr Kelly said.

Mr Kelly said that the Gunns proposal would provide a more certain outcome for these older schemes, and given the support the proposal has received from receiver McGrathNicol, there appears to be minimal transaction risk if the vote goes in favour of the Gunns proposal on 23 December.

"It may not be perfect, but it represents the best chance for advisers to salvage a commercial outcome for their clients. As such, it has our full support," Mr Kelly said.