Analyst: Canfor Corp., West Fraser Timber Merger Speculation
Recent activity at West Fraser Timber Co. Ltd. has revealed that British Columbian billionaire Jim Pattison owns a significant minority stake in the company, prompting speculations of a merger with rival Canfor Corp., according to an analyst.
Pattison owns 10 percent of West Fraser, North America’s No. 1 lumber producer, said Paul Quinn, a paper and forest products industry analyst at RBC Capital Markets, and already owns a majority stake in Canfor, North America’s No. 2 lumber producer. “That automatically brings up the idea of Canfor and West Fraser coming together,” said Quinn. “It’s an interesting idea, but would be very difficult to accomplish.”
Pattison has owned the same stake in West Fraser since 2011, Quinn said. However, it wasn’t until after a series of share-repurchases by the company – which reduced the size of West Fraser’s pool of outstanding shares – that Pattison’s stake amounted to just over 10 percent, which is the threshold at which shareholders must disclose their holdings, under Canadian Securities Administration regulations.
Quinn mused about what a merger of the two would look like in a research note to clients. Since they are the two dominant forest companies in B.C.’s interior, Quinn sees certain “synergies” in a combination through reducing supply costs at combined operations, particularly the combined eight pulp mills between the two, and in a single head office. “I have no idea what (Pattison) wants to do,” Quinn said. “He obviously likes the (forestry) sector, it’s a good long-term investment.”
However, Quinn said because of Pattison’s history with owning big stakes in forest companies that merge (in 2003 he held big stakes in Canfor and Slocan Forest Products before they combined in a $455-million deal) “we could argue that a combination is a possibility.”
From the Vancouver Sun: vancouversun.com.
RELATED ARTICLES
Canfor Plans New Sawmill In Louisiana
West Fraser Purchases Norbord For $3 Billion
Canfor’s Vida Group Buys Sweden Mills
No-Go On Proposed Purchase Of Canfor
Latest News
No Barnum & Bailey Act But We’re Trying
Article by Rich Donnell, Editor-in-Chief, Timber Processing September 2020 – If you didn’t know any better, you would think the Timber Processing & Energy Expo, scheduled for September 30 to October 2…
Single-Family Housing Starts Go Up
According to the U.S. Census Bureau monthly new residential construction report, U.S. single-family housing starts continued their climb in August, reaching 1.021 million, a 4.1% increase over July and 12% above August a year ago….
Oregon Road Closures Hit Log Truck Routes
Oregon forest products operators are facing more challenges thanks to the indefinite closure of key state highway transportation routes that connect the high Cascades and central Oregon with key log markets in the Willamette…
Find Us On Social
Newsletter
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
Subscribe/Renew
Timber Processing is delivered 10 times per year to subscribers who represent sawmill ownership, management and supervisory personnel and corporate executives. Subscriptions are FREE to qualified individuals.
Advertise
Complete the online form so we can direct you to the appropriate Sales Representative.