No deal for Canfor and Great Pacific
Canfor Corporation and Great Pacific Capital Corp. mutually announced that they have terminated an acquisition agreement.
The plan called for Great Pacific Capital, a subsidiary of Great Pacific, to acquire the remaining 49% of Canfor that it does not already own. Great Pacific is owned by Canadian billionaire Jim Pattison.
Under terms of the agreement, Great capital would have purchased the remaining shares of Canfor in a deal worth about 1 billion Canadian dollars (US$760 million) and then take the Vancouver, British Columbia-based lumber and pulp producer private. Canfor is traded on the Toronto Stock Exchange.
But a vote by Canfor shareholders cast by proxy resulted in only 45% approving the arrangement. According to Canfor, the “majority of the minority” was not met and a vote of 50% was needed.
Previously, a special committee from Canfor's Board of Directors had backed the deal.
A special meeting of Canfor shareholders, scheduled for Dec. 18, has now been canceled. Additionally, Great Pacific will now pay 50% of the out-of-pocket expenses incurred by Canfor in connection with the proposed deal.
AST Trust Company will be returning any physical share certificates that have been submitted by shareholders of Canfor in connection with the agreement.
In a prepared statement, Canfor said it plans to continue to diversify its business and pursue growth strategies in positioning itself for long-term success and sustainability.
Lumber supply exceeding demand, along with sagging prices, continued to challenge Canfor throughout 2019. The result was numerous curtailment and shutdown announcements throughout the company’s network of sawmills
For Canfor’s third quarter 2019, total lumber shipments were at 1.23 billion board feet and 16% lower than the previous quarter principally. Total lumber production at 1.18 billion board feet was 15% lower than the previous quarter primarily due to production curtailments and mill closures, which reduced Western SPF production capacity by approximately 37%.
Third quarter 2019 sales also dropped 17% while the company reported a net loss of C$90.4 million (US$68.70 million).
According to Canfor’s 2018 Sustainability Report, about 64% of its lumber production is shipped to United States with 23% sent to Asia and 11% remaining in Canada.
The plan called for Great Pacific Capital, a subsidiary of Great Pacific, to acquire the remaining 49% of Canfor that it does not already own. Great Pacific is owned by Canadian billionaire Jim Pattison.
Under terms of the agreement, Great capital would have purchased the remaining shares of Canfor in a deal worth about 1 billion Canadian dollars (US$760 million) and then take the Vancouver, British Columbia-based lumber and pulp producer private. Canfor is traded on the Toronto Stock Exchange.
But a vote by Canfor shareholders cast by proxy resulted in only 45% approving the arrangement. According to Canfor, the “majority of the minority” was not met and a vote of 50% was needed.
Previously, a special committee from Canfor's Board of Directors had backed the deal.
A special meeting of Canfor shareholders, scheduled for Dec. 18, has now been canceled. Additionally, Great Pacific will now pay 50% of the out-of-pocket expenses incurred by Canfor in connection with the proposed deal.
AST Trust Company will be returning any physical share certificates that have been submitted by shareholders of Canfor in connection with the agreement.
In a prepared statement, Canfor said it plans to continue to diversify its business and pursue growth strategies in positioning itself for long-term success and sustainability.
Lumber supply exceeding demand, along with sagging prices, continued to challenge Canfor throughout 2019. The result was numerous curtailment and shutdown announcements throughout the company’s network of sawmills
For Canfor’s third quarter 2019, total lumber shipments were at 1.23 billion board feet and 16% lower than the previous quarter principally. Total lumber production at 1.18 billion board feet was 15% lower than the previous quarter primarily due to production curtailments and mill closures, which reduced Western SPF production capacity by approximately 37%.
Third quarter 2019 sales also dropped 17% while the company reported a net loss of C$90.4 million (US$68.70 million).
According to Canfor’s 2018 Sustainability Report, about 64% of its lumber production is shipped to United States with 23% sent to Asia and 11% remaining in Canada.