European Forest Resources Acquisition Ltd is to pursue a deal for Highland Timber’s forest assets, after a number of shareholders agreed to vote against approving an offer from FIM Timber Growth Fund IV.
Highland Timber has recommended that the FIM offer, which values the company’s forest assets in Scotland and Wales at £12.5m, be accepted by shareholders, after an initial £9.9m had been rejected at an emergency general meeting in June.
However, European Forest Resources Acquisition has said that the board of Highland Timber had indicated that it was “minded to recommend” the firm’s offer and that the two companies “were engaged in finalising and documenting” the deal.
European Forest Resources Acquisition will now go ahead with its offer of 120p per share, equating to £14.8m, “without the previously proposed recommendation of the board” and “with the support of a number of the target shareholders”.
“We believe the offer represents an excellent price for the target shares,” said European Forest Resources Acquisition director Lawrence Caperton.
“Importantly, [it] offers a certain and immediate cash exit for the target’s shareholders, in contrast to the FIM offer which leaves the target shareholders invested in a cash shell.”
Highland Timber is due to hold a further emergency general meeting on September 20, where shareholders will be given the chance to vote on the FIM offer.
