The bid by Samuel Terry Asset Management relies on existing KIPT shareholders agreeing to sell their shares for $1.05 apiece, which was the closing price of the stocks on Friday.

STAM is already a substantial shareholder with 14.8 million shares, which equates to about 26 per cent of KIPT’s holdings, which have a total value of $59.23 million.

KIPT’s shares jumped 7 per cent this morning on the ASX to $1.13 at 11.30am following the announcement of the takeover bid.

But STAM says the $1.05 offer is a best and final offer. The offer period is set to begin on May 18 and end on June 18, unless extended or withdrawn under the Corporations Act.

STAM is making the offer in its capacity as trustee for Samuel Terry Absolute Return Active Fund.

Kangaroo Island Plantation Timbers published an official response to the STAM takeover bid just before noon.

It said the company had only just received copies of the bidder’s statement and was currently reviewing them.

“The company intends to provide an initial response to the Takeover Offer within the next 48 hours, once it has completed its initial review of the bidder’s statement and other documents,” the ASX statement said.

“The company notes that the Takeover Offer is unconditional and will remain open until 18 June 2021. The company therefore recommends that shareholders take no action in respect of the Takeover Offer until the company has provided its initial response.”

KIPT last month rejected a separate $20 million offer to buy the majority of its forestry land and use it for farming, saying the bid was “far below book value”.

That offer was made by KI Phoenix – which is partly owned by national farmland investment manager AAG Investment Management – to buy 15,600 hectares of KIPT’s land and return bushfire-hit forest to agricultural land two weeks ago.

About 95 per cent of KIPT’s plantations were impacted by the devastating fires that tore through the island in December 2019 and January 2020. The company has received more than $60 million in insurance compensation payouts since the fires and is in a race against time to salvage damaged timber and transport it to export markets before it rots.

The company owns about 25,000ha of “productive Kangaroo Island land” of which 14,200 was forests and a further 7300ha is native vegetation.

It has cash and cash equivalents of $35.5 million and is debt-free.

KIPT also has an estimated 4.5 million tonnes of fire-affected timber on the island, which it began shipping to mainland sawmills via the SeaLink passenger ferry service in February. In March, the first barge of logs was dispatched from Kingscote to South Korea via Port Adelaide.

The company estimates it has two years before its burnt softwood pine trees rot, while its hardwood blue gums could potentially last up to five years.

It is also awaiting a State Government decision on its proposed port at Smith Bay on the island’s north coast.

The proposed $40 million jetty and handling facility has been declared a major project and is still awaiting a final decision from the State Government, following public consultation in February.