Canfor agrees to go private
Canadian forest products giant Canfor Corporation announced that it has entered into an agreement with Great Pacific Capital Corp., which will result in the company going private.
Under terms of the deal, Great Pacific and its affiliates will acquire all of the outstanding common shares of Canfor it does not already own for a cash price of 16 Canadian dollars per share (US$12.25). Great Pacific already owns approximately 51% of Canfor.
The move arrives following the recommendation of an independent committee of Canfor’s board of directors.
This past August, Canadian billionaire Jim Pattison – the owner of Great Pacific - made an offer to take the Vancouver, British Columbia-based company private for about C$982 million Canadian dollars (US$752 million).
The agreement reached with Great Pacific is a premium of approximately 81.8% to the closing price of the Canfor shares on Aug. 9, 2019, the last trading day prior to the announcement by Great Pacific to acquire Canfor.
Ongoing industry headwinds, including high log costs due to supply constraints and significant declines in benchmark prices for both lumber and pulp, have had a severe impact on Canfor’s financial results.
Earlier this month, Canfor reported that net sales fell 17% for the third quarter while also reporting a net loss of C$90.4 million (US$69.2 million) for the period.
“The special committee believes that the transaction represents fair value for shareholders and is the correct path forward for Canfor, Canfor employees, communities and Shareholders,” said Conrad Pinette, chair of the special committee.
A special meeting to consider the transaction is expected to be held in December. If approved by shareholders, Canfor shares will discontinue trading on the Toronto Stock Exchange. Canfor said the transaction is expected to close by the end of 2019.
Under terms of the deal, Great Pacific and its affiliates will acquire all of the outstanding common shares of Canfor it does not already own for a cash price of 16 Canadian dollars per share (US$12.25). Great Pacific already owns approximately 51% of Canfor.
The move arrives following the recommendation of an independent committee of Canfor’s board of directors.
This past August, Canadian billionaire Jim Pattison – the owner of Great Pacific - made an offer to take the Vancouver, British Columbia-based company private for about C$982 million Canadian dollars (US$752 million).
The agreement reached with Great Pacific is a premium of approximately 81.8% to the closing price of the Canfor shares on Aug. 9, 2019, the last trading day prior to the announcement by Great Pacific to acquire Canfor.
Ongoing industry headwinds, including high log costs due to supply constraints and significant declines in benchmark prices for both lumber and pulp, have had a severe impact on Canfor’s financial results.
Earlier this month, Canfor reported that net sales fell 17% for the third quarter while also reporting a net loss of C$90.4 million (US$69.2 million) for the period.
“The special committee believes that the transaction represents fair value for shareholders and is the correct path forward for Canfor, Canfor employees, communities and Shareholders,” said Conrad Pinette, chair of the special committee.
A special meeting to consider the transaction is expected to be held in December. If approved by shareholders, Canfor shares will discontinue trading on the Toronto Stock Exchange. Canfor said the transaction is expected to close by the end of 2019.