As the Matariki Forests sale moves into its final stages, international interest is growing despite the turmoil in credit markets.

Paul Nichols of Rayonier New Zealand, which manages Matariki Forests, says there are 12 serious buyers expressing interest for the 140,000ha estate.

Indicative bids should start coming in some time in the next 10 days, once the sale flier is sent out today, he says.

The tender process has an estimated closing date of “before Christmas” with a final sale expected in quarter one 2009.

Shareholders Rayonier (40%), AMP Capital (35%) and Deutsche Bank (25%) unanimously agreed on the sale at a board meeting earlier in the year, and have received a series of expressions of interest from international bidders.

Matariki Forests is 85% radiata pine, 10% Douglas fir and the remainder consisting of mixed wood types.

There has been no reserve set yet. The last major sale of this kind was in 2006 when Carter Holt Harvey sold 187,000ha to Hancock Timber Resource Group for $1.6 billion, equating to around $9000 a hectare.

Although this kind of price is probably no longer viable in the current market, applying those figures to the current sale would equate to around $1.26 billion.

Mr Nichols places this figure at the top end of Rayonier’s valuations.

When asked why shareholders were looking to divest themselves of the company, he said that the investors wanted to “realise their valuation.”

Under current credit conditions there’s no sign of any debt-funded bids. Mr Nichols says almost all of the interest has come from fund managers, with a high percentage from pension funds.

The majority of these buyers are coming from North America, with some interest from the EU. There has also been some sovereign fund interest from the Middle East.

Australian bids are described by Nichols as “muted” at this stage.

The forestry industry is often cited as a “counter-cyclical” industry given its resilience in any market conditions.

“Forestry is also quite flexible in that harvests can be changed to suit market conditions,” Mr Nichols said.

With the falling New Zealand dollar, lower transit costs and continued strong demand from China, the sale is certainly less risky than most investments at the moment.

First New Zealand Capital is handling the sale, with Simpson Grierson dealing with legal duties.