Canfor board agrees to sell remaining shares
Canfor Corporation Oct. 28 announced that an independent committee of Canfor’s board of directors (Special Committee), has entered into an arrangement agreement with Great Pacific Capital Corp. for the sale of remaining shares of the company.
Under the terms of the Arrangement Agreement, Great Pacific, owned by B.C. billionaire Jimmy Pattison, which along with its affiliates owns approximately 51% of the issued and outstanding common shares of Canfor, will acquire all of the Canfor shares it does not already own for cash consideration of $16 per share by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia), a company media release outlined.
Conrad Pinette, Chair of the Special Committee, said, “Over the last few months, with the assistance of the Special Committee’s independent financial and legal advisors, we have conducted a thorough evaluation of the best interests of Canfor and the fairness of Great Pacific’s proposal to Shareholders. Following the conclusion of this evaluation, we are pleased to have reached an agreement with Great Pacific. 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.”
Canfor’s media release noted limited strategic alternatives led to the committee decision. “Great Pacific and its affiliates currently own approximately 51% of the Canfor shares and, as Great Pacific has indicated that it does not intend to sell any Canfor shares, there are limited strategic alternatives available to Canfor.
“The board, after receiving financial and legal advice, and following receipt of the Valuation and the Fairness Opinion, and the recommendation of the Special Committee, approved the transaction, determined that the transaction is in the best interests of Canfor and fair to Shareholders (other than Great Pacific and its affiliates) and resolved to recommend in the management information circular to be sent to shareholders that shareholders vote in favour of the transaction.”
Two-thirds of shareholders must approve the proposed sale of shares, with an estimated price tag for the sale of $982 million.
The completion of the transaction will also be subject to obtaining required court and other approvals and satisfaction of closing conditions customary for a transaction of this nature.
It is anticipated that the Special Meeting to consider the transaction will be held in December.
Lead image: Canfor’s Radium Mill. e-KNOW file photo