[LOGO] TENON                                                    NEWS RELEASE
     Wood Solutions to the World


TO:     THE BUSINESS EDITOR

From:   Paul Gillard - Director, Corporate & Legal Services, Tenon Limited
        Telephone:      64-9-571 9846
        Fax:            64-9-571 9872


Please note: If you do not receive 1 page(s) including this page, or if any page
is not readable, please call the Marlene Krone immediately on telephone 64-9-571
9808.

Information on Tenon Limited can be found at http://www.tenon.co.nz.

                STOCK EXCHANGE LISTING: NEW ZEALAND (TEN) (TENPA)

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                 TENON CONFIRMS CAPITAL RETURN OF NZ$321 MILLION


Auckland,  2  February  2005 - Tenon  announced  today  that the High  Court had
granted final orders approving the share  cancellation and associated  return of
capital that had been authorised by Tenon  shareholders at the Company's  Annual
Shareholders Meeting held on 22 December 2004.


Tenon will cancel three out of every four ordinary and preference  shares in the
Company.  Shareholders  will  receive  $1.5333 for each share  cancelled,  which
equates to $1.15 per share held before the cancellation.

The total amount of the capital return is approximately NZ$321 million.

Only those Tenon shareholders  registered as at 5:00pm on Wednesday, 16 February
2005 (i.e. the "record date") will  participate  in the share  cancellation  and
return of capital.  Payment of the capital return will be made by cheque, except
in the case of New  Zealand  shareholders  who  have  previously  provided  bank
account details to the Company's share registrar (Computershare),  in which case
payment  will be by way of direct bank  credit.  The payment will be made in New
Zealand dollars.


The  payment of the return of  capital  is  expected  to be made on or around 23
February 2005, other than for those  shareholders who elect to apply all or part
of their  capital  return  under the  recently  announced  Tenon 750 Share Plan.
Revised  shareholder  holding  statements will be sent to shareholders  with the
relevant  payment,  with  confirmation  of the  relevant  payment  for those who
receive the payment by direct credit.

As a consequence of the approval of the capital return, the distinction  between
the Company's  ordinary and preference shares will be removed.  With effect from
the above record date, the Company will only have one class of shares on issue.

ENDS