Billionaire wants to take Canfor private
British Columbia lumber producer reviewing purchase offer.
Canadian billionaire Jim Pattison has made an offer to take lumber producer Canfor private for about $981.6 million Canadian dollars (US$742 million).
Pattison’s company, Great Pacific Capital Corp., already owns 51% of the Vancouver, British Columbia-based forest products company.
On Aug. 10, Pattison made a pitch to purchase the remainder of Canfor at a price of roughly C$16 per share (US$12.08). This is about an 82% premium over Canfor’s closing price on Aug. 9.
With lumber prices sagging in 2019, Canfor has been forced to curtail or shut down lumber production operations in British Columbia. The company’s stock has fallen as much as 69% this year.
In a company statement issued on Aug. 12, Canfor said it has established a special committee of independent directors to review the offer. Canfor said it will be in a better position to respond to the offer once a thorough review has been conducted.
For its second quarter 2019, Canfor reported a net loss of C$48.6 million (US$36.7 million) as sales for the period fell roughly 10% to C$1.13 billion (US$853 million).
Canfor primarily produces softwood lumber. In the past three months, numerous major lumber producers in British Columbia have cut back on sawmill operations due to a soft U.S. housing market and falling board prices.
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