But it is expected that there would not have been much interest in the $1.50 share offer, given shares in the timber company have dropped to as low as $1.09.

Shadforths private client advisor Chris Elliot said that the retail offer was a legal requirement for the company after its institutional share offer, which raised $336 million.

The expected failure was not because of the company's full year results or the controversial $2 billion pulp mill project, he said.

``FEA slipped 20 per cent in value in a month so the market is what has sold down forestry companies,'' Mr Elliot said.

``If the sharemarkets had not collapsed in the past two weeks (the share price) may well have stayed at $1.50 or greater.''

Mr Elliot said it was a positive sign for investors that three Gunns directors had purchased Gunns shares on the open market in the past month.

Cornelis van der Kley bought 25,000 new shares at a cost of $31, 250 on September 17.

On September 8 Robin Gray added 100,000 to his portfolio at a cost of $139,000 and Paul Teisseire purchased 60,000 at a cost of $84,200.

``It is always a positive sign to see directors willing to purchase stock,'' he said.

Meanwhile, the company has announced that the share price for shareholders who have elected to participate in

its Dividend Reinvestment Plan was $1.1798.