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
Resolute Forest Products To Build $50M Atikokan Sawmill
Resolute Forest Products will build a new sawmill in the Atikokan area, according to Resolute president and CEO Richard Garneau. The mill will employ about 90 people, with additional indirect jobs related to hauling lumber…
Weyerhaeuser Posts Best Sales In Four Years On U.S. Housing Recovery
Weyerhaeuser Co., a century-old producer of forest products, reported its highest revenue in more than four years, adding heft to recent government data showing that a recovery in the U.S. housing market has taken hold.…
TP Man Of the Year: Industry’s Best Of the Best
googletag.cmd.push(function() { googletag.display(‘div-gpt-ad-1548381510056-0’); }); Article by Dan Shell, Managing Editor, Timber Processing (2013) My first involvement with the Timber Processing Man of the Year award was in February 1989: I was with the company less…
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.