Offer made to make Canfor a private company

Marco Green
August 13, 2019

Now, one of its stakeholders has made an offer to acquire the whole company and take it private.

He figures the $16 Cdn a share offer values Canfor's capacity of 6.55 billion board feet a year at $298 U.S. per thousand board feet, well below the $615 USA per thousand board feet West Fraser Timber Co.

Pattison's Great Pacific Capital Corp., which already owns 51% of Canfor, proposed on Sunday to buy out the remaining shares for $16 apiece, an 82% premium to the stock's closing price on Friday.

Pattison, 90, owns supermarkets, fisheries and billboards through his conglomerate holding company Great Pacific. However, the company emphasised that the offer was non-binding and that there was no certainty that it would be pursued by Canfor.

Following the Special Committee's review of the Indicative Offer and the receipt of financial and legal advice, Canfor will be in position to respond to the statements made by Great Pacific in its August 11, 2019 press release, should Canfor determine it is appropriate to do so.

Great Pacific Capital's plans include delisting Canfor from the Toronto Stock Exchange, if the transaction is implemented.

Great Pacific says privatization would eliminate "significant administrative expenses" incurred by keeping the company public, and the reinvestment of cash into stabilizing Canfor "particularly in British Columbia, where the industry environment remains particularly uncertain and challenging".

Meanwhile, Canfor Pulp Products, in which Canfor has a 54.8 per cent stake, could be rolled into the parent company to benefit from the scale, the analyst noted. The combination has forced British Columbia producers to curtail and shutdown production at various mills. Canfor has approximately 6,300 employees.

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