Heavily leveraged Canadian timber and forestry giant TimberWest Forest Products looks set to lose its public listed status.
The company was hit by the market downturn and it was reported to be close to closure due to its levels of debt. Over the last year, however, demand has picked up, particularly from China, and now two of its main unit holders, Candian pension funds,
British Columbia Investment Management Corporation (BCIMC) and the Public Sector Pension Investment Board (PSP) have offered to buy the business and its assumed debt for C$1.03bn.
TimberWest now has 60 days to secure a superior price, but the board has accepted the pension companies’ offer, which is 25% higher than the 20-day weighted average price of its “stapled unit” shares.
“We believe this transaction provides significant value to TimberWest unitholders,” said chairman Edward Daughney. “BCIMC and PSP Investments are both leading Canadian pension plans well-positioned to support the long-term development of TimberWest’s exceptional timber and real estate assets and emerging new businesses.”
