The company owned by one of Canada’s richest men has made a bid for Vancouver-based forestry company Canfor.
If the near-billion-dollar deal is approved, it would see Canfor, which is currently a publicly traded company, turned private.
Billionaire Jim Pattison’s Great Pacific Capital Corp. already owns about 51 per cent of Canfor. It has now offered to buy the remaining shares at $16 each, an 81.8 per cent premium over the $8.80 the stock was trading for at the end of Friday on the Toronto Stock Exchange.
On Monday, shares jumped by more than 70 per cent on news of the all-cash offer.
Canfor says a committee of independent directors is reviewing the offer.
Great Pacific says privatization would eliminate “significant administrative expenses” incurred by keeping the company public, and the reinvestment of cash into stabilizing Canfor “particularly in British Columbia, where the industry environment remains particularly uncertain and challenging.”
Ravi Kahlon, the North Delta NDP MLA recently promoted to parliamentary secretary for forests, lauded the potential deal.
“It’s certainly good news for B.C.’s forests sector, it’s good news for B.C.’s economy, and I think it’s a good sign for how we’re handling a very difficult forestry file in this province,” he said.
B.C.’s forestry sector has been in crisis mode recently, amid closures, layoffs and shift reductions at mills across the province, including virtually all of Canfor’s operations.
Great Pacific says it would shift Canfor to a 20-year strategy that would see the company move away from milling two-by-fours to a focus on value-added goods.
— With files from Keith Baldrey and the Canadian Press