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
USNR Parent Company Acquires Norwood Sawmills
USNR, a global supplier in wood processing technologies, is pleased to announce that Norwood Industries, a supplier of portable sawmills, has joined its corporate family. Norwood will operate as an independent sister company alongside USNR,…
Ben Brydges Appointed Wood-Mizer CEO
Wood-Mizer has named Ben Brydges as Chief Executive Officer. In his new role, Brydges will guide the company into its next phase of strategic growth and product innovation, strengthening Wood-Mizer’s position as a trusted name…
More Than Tariffs Cause Sinclar Forest Products Mill Reductions
Prince George, British Columbia-based Sinclar Forest Products is reducing production output at its Apollo Forest Products (Fort Saint James), Nechako Lumber (Vanderhoof) and Lakeland Mills (Prince George) facilities by 40%, which the company says is…
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.