Friendly takeover

Tem­bec gets US$807-mil­lion bid from Florida-based Ray­onier Ad­vanced Ma­te­ri­als

Cape Breton Post - - Business -

Tem­bec has re­ceived a friendly takeover of­fer from Ray­onier Ad­vanced Ma­te­ri­als, a Florida-based chem­i­cal com­pany, in a deal that values the Que­bec lum­ber gi­ant at US$807 mil­lion, in­clud­ing as­sumed debt.

The merged en­tity would keep a Cana­dian head­quar­ters in Mon­treal, with the main cor­po­rate of­fice in Jack­sonville, Fla., both firms said in a joint state­ment Thurs­day.

“Ray­onier Ad­vanced Ma­te­ri­als is the ideal part­ner for us, given the com­ple­men­tary na­ture of our prod­ucts, ex­per­tise, and re­sources,” Tem­bec CEO James Lopez said.

“They are com­mit­ted to our op­er­a­tions and em­ploy­ees in Canada and France and — above all — to the values we share.”

Tem­bec share­hold­ers (TSX:TMB) are be­ing of­fered C$4.05 in cash or 0.2302 of a share in Ray­onier Ad­vanced Ma­te­ri­als, sub­ject to a cap on the to­tal amount of cash or shares that will be is­sued. The pur­chase price is 37 per cent above the Wed­nes­day clos­ing price for Tem­bec on the Toronto Stock Ex­change.

Shares in Tem­bec soared on the news Thurs­day, up 40.3 per cent to $4.14 on the Toronto Stock Ex­change about an hour af­ter the open­ing bell.

The trans­ac­tion comes as Tem­bec, like other Cana­dian forestry com­pa­nies, finds it­self in the crosshairs of the U.S. over soft­wood lum­ber. Last month, it was hit with a 19.88 per cent pre­lim­i­nary duty on soft­wood ship­ments to the U.S.

Founded in 1972, Tem­bec pro­duces lum­ber, pa­per, pulp and spe­cialty cel­lu­lose pulp. It has about 3,000 em­ploy­ees.

Ray­onier Ad­vanced Ma­te­ri­als is a sup­plier of high pu­rity cel­lu­lose, used in cell­phones, com­puter screens, fil­ters, tex­tiles and phar­ma­ceu­ti­cals.

It has plants in Florida and Ge­or­gia. “By join­ing forces, we are di­ver­si­fy­ing our prod­uct of­fer­ing in high pu­rity cel­lu­lose and ex­pand­ing into the ad­ja­cent pack­ag­ing and for­est prod­ucts mar­kets with sig­nif­i­cant scale,” said Paul Boyn­ton, the chair­man, pres­i­dent and CEO of Ray­onier Ad­vanced Ma­te­ri­als.

Shares in Ray­onier Ad­vanced Ma­te­ri­als were up 11.4 per cent to US$14.75 on the New York Stock Ex­change in morn­ing trad­ing Thurs­day.

The pro­posed takeover has the unan­i­mous ap­proval of each com­pany’s board of di­rec­tors.

It re­quires ap­provals from courts, reg­u­la­tors and share­hold­ers and is ex­pected to close in the sec­ond half of 2017.

CP PHOTO/PAUL CHIASSON

Tem­bec CEO James Lopez, left, and Paul Boyn­ton, chair­man, pres­i­dent and CEO of Ray­onier Ad­vanced Ma­te­ri­als, ar­rive at a news con­fer­ence Thurs­day in Mon­treal. The Florida-based chem­i­cal com­pany is plan­ning to buy Tem­bec Inc. in a friendly takeover deal that values the Que­bec-based forestry com­pany at US$807 mil­lion, in­clud­ing as­sumed debt.

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