Canfor Corp. has agreed to be taken private by a company controlled by billionaire Jim Pattison.
Great Pacific Capital Corp., which already owns 51 per cent of the B.C.-based lumber producer, will acquire the remaining Canfor shares it does not already own for $16 per share in cash. That represents an 82-per-cent premium to the stock’s closing price of $8.80 on Aug. 9, the last trading day before Great Pacific tabled its proposal.
The deal is subject to shareholder approval at a special meeting in December.
Canfor said late Monday the decision to accept Great Pacific’s offer was made based on a recommendation by an independent committee made up of Canfor’s board of directors.
The special committee outlined a number of factors it considered before making its recommendation, including the significant premium, a compelling value proposition for minority shareholders, and limited strategic alternatives; it also noted financial advisor Greenhill pegged Canfor’s fair value at $14.24 to $19.38 per share.
“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 Canfor’s special committee, in a release.
When Great Pacific first tabled the offer to take Canfor private, it said removing “significant administrative expenses” that comes with maintaining a public listing in Canada would help stabilize Canfor’s operations as the lumber industry faces ongoing challenges, particularly in B.C.
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