The Canfor Corporation Board of Directors is recommending that shareholders approve its purchase by Great Pacific Capital Corporation.
Canfor, based in Vancouver, British Columbia, Canada, operates a sawmill in El Dorado.
Canfor Corporation said Wednesday it has filed its management information circular and related voting materials for a special meeting of Canfor shareholders to be held in connection with the proposed plan of arrangement with 1227738 B.C. Ltd.
1227738 B.C. Ltd is a wholly-owned subsidiary of Great Pacific Capital Corp.
The meeting will be held at 9 a.m. Wednesday, December 18, at the Vancouver Marriott Pinnacle Downtown Hotel.
Shareholders will be asked to consider and vote upon a resolution to approve the arrangement. The Great Pacific subsidiary will acquire all of the outstanding common shares of Canfor not already held by Great Pacific or its affiliates, for cash consideration of $16 Canadian dollars.
The Canfor board has determined that the arrangement is in the best interests of Canfor and fair to shareholders.
The purchase price represents a premium of approximately 81.8 percent to the closing price of the Canfor shares on August 9, the last trading day prior to the announcement by Great Pacific of its indicative offer for Canfor.
Ongoing industry headwinds in the forestry sector, including high log costs due to supply constraints and significant declines in benchmark prices for both lumber and pulp, have had negative impacts on Canfor’s recent financial results, the company said. It is unknown how long the challenging industry conditions may persist and uncertain when financial results may improve as a result of capacity rationalization in British Columbia.
These conditions have also led to volatility in the trading price of Canfor shares. The arrangement provides holders of Canfor shares, other than Great Pacific and its affiliates, with immediate and certain value.
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