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No-Go On Proposed Purchase Of Canfor

Canfor Corp. has agreed with Great Pacific Capital Corp., a wholly-owned subsidiary of Great Pacific, to terminate a previously announced arrangement agreement that called for Great Pacific, which already owns 51% of Canfor, to purchase the remainder of the shares for nearly $1 billion.

Based on a vote of Canfor shareholders, the “majority of the minority” vote required under a “Protection of Minority Security Holders in Special Transactions” instrument, will not be achieved, coming up at least 5% short in votes.

The deal, which would have turned Canfor from a public company into a private one, appeared to have the momentum to reach fruition, with the board of directors recommending it following endorsement from various special committees and shareholder services.

The board had stated that the purchase price represented a significant premium over the existing share price, and that ongoing industry headwinds in the forestry sector had caused some instability in trading prices and in company operations, including multiple curtailments of sawmill production.

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