B.C. billionaire Jim Pattison’s offer of $16 a share may be about twice the current market value of forest company Canfor Corp., but it’s not a done deal, according to the company’s board.
Canfor issued a statement on Sunday night after Pattison’s holding company Great Pacific Capital Corp. announced its bid to buy the remaining shares of Canfor and take it private. Pattison is already a major shareholder of Canfor and West Fraser Timber, two of the companies that are struggling through a downturn in their B.C. forest products operations.
The Canfor statements reads: “Canfor cautions its shareholders and potential investors that the indicative offer is non-binding on Great Pacific and there can be no certainty that the indicative offer or other strategic transaction with Great Pacific or any other person will be pursued by Canfor, supported by Canfor’s board of directors or ultimately completed.”
Pattison, the 90-year-old investor whose holdings include grocery chain Save-On-Foods, real estate, insurance, broadcasting and other assets, has a history of long-term investing. In a statement, Great Pacific said it already owns 51 per cent of Canfor shares.
“Great Pacific’s ability to complete the proposed transaction is not subject to financing or due diligence and provides immediate liquidity for minority shareholders,” the statement said.
The offer comes at a difficult time for the B.C. forest industry, with temporary or permanent mill closures across the Interior, including the shuttering last month of the Canfor mill in Vavenby, affecting more than 170 jobs.
Operators point to shortages of logs in the wake of B.C. beetle infestations, a slump in North American lumber prices, pressure from the latest round of import penalties imposed by the U.S. government, and high costs and stumpage fees imposed on Crown land timber.