'Great timing' by Jim Pattison — but 82% premium comes as Canfor treads multi-year lows

Vancouver billionaire Jim Pattison has offered to take Canfor, one of the country’s largest lumber and forestry product companies, private. BLOOMBERG/POSTMEDIA

James Allen Pattison, OC OBC is a Canadian business tycoon, investor, and philanthropist. It is headquartered in Vancouver, British Columbia, where he serves as executive director, president and sole owner of the Jim Pattison Group, the second-largest private company in Canada, with more than 45,000 employees worldwide and annual sales of $ 10.1 one billion The Group is active in 25 divisions, according to Forbes, including packaging, food, forest products.

Now, Jim Pattison had his ‘Great Opportunity’, but 82% of premium occurs when Canfor achieves minimums of several years. The offer seems rich for investors, but it can become a bargain of the billionaire.

As Canada’s forestry industry undergoes a pronounced recession, billionaire Jim Pattison seized the moment with a proposal to buy and take Canfor privately, one of the largest timber and forest products companies in the country.

Proposal with great chances of success

It should be noted that Pattison’s Great Pacific Capital Corp, which already owns 51 percent of Canfor, offered on Sunday to pay $ 16 per share, a premium of 81.8 percent at last Friday’s closing price of $ 8.80.

Likewise, it is well known that the price of the company rose 72 percent to $ 15.15 on Monday, which many analysts took as a sign that the proposal had a good chance of success. If it becomes true and in this way it succeeds, it would mark one of the highest premiums paid by a commodity company in recent years.

Even so, it is important to mention that a testimony of the volatility of the forestry sector comes after the price of Canfor’s shares reached historic highs last summer only to collapse to historic lows this summer amid an imbalance of supply and demand in the timber market and uncertainty about the US real estate market.

However, the offer of $ 16 per share falls below the target price of some analysts for Canfor; and some believe that the sector must recover quickly, possibly before the end of the year.

Thus, it is necessary to emphasize that a spokesman for Canfor declined to comment, but the company has said it will form a special committee to review the offer. Given Pattison’s great position in the company, analysts said another offer is unlikely.

Source: Gabriel Friedman | Vancouver Sun