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Great Pacific offers to take Canfor private
Posted on Monday, 12 August 2019 11:54
Jim Pattison Group’s Great Pacific Capital is planning to buy out the minority shareholders of Canfor in a deal that values the whole of the Canadian lumber producers at CAD 2.00 billion (USD 1.52 billion).
The suitor is proposing to acquire the remaining 49.0 per cent not already held in the Vancouver-headquartered integrated forest products for CAD 16.00 apiece by way of a court-supervised statutory plan of arrangement.
It said the approach “offers fair value” and provides immediate liquidity for minority shareholders – not to mention the price is an 81.8 per cent premium to the last unaffected close of CAD 8.80 on 9th August.
Great Pacific noted Canfor is “facing important strategic and capital decisions”, which it believes are “best suited to a private company with a long-term focus”.
Meanwhile, the lumber producer, one of the largest in Canada, cautioned the indicative offer is non-binding and there is no certainty the proposal or any other strategic transaction will be pursued or supported.
Canfor has set up a special committee of independent directors to review the approach and will, in consultation with legal and financial advisors, consider strategic alternatives and its response, if any, to the bid.
The company has significantly grown recently; last year it reached agreements to acquire 70.0 per cent of Vida Group of Sweden and Elliott Sawmilling in South Carolina to add over 1.30 billion board feet in capacity,
It has also completed a CAD 65 .00 million capital project at Northwood Pulp Mill with the installation of a new 32-MW condensing turbo-generator that was commercialised in early 2019.
Canfor generated sales of CAD 2.46 billion in the six months to 30th June 2019 (H1 2018: CAD 2.69 billion) and incurred a net loss of CAD 138.10 million (H1 2018: CAD 282.00 million profit).
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