Tembec takeover approved in vote

FORESTRY

• Shareholders in Quebec forestry firm Tembec have overwhelmingly endorsed a friendly takeover offer by Rayonier Advanced Materials, a chemical products company based in Florida.

About 95 per cent of shareholders who voted were in favour of the deal, valued at C$1.1 billion — well above the two-thirds support required.

The agreement, which is subject to regulatory approvals, is expected to close by the end of year.

Although Rayonier is not constrained by any written guarantees, it has committed to maintain a Canadian head office and further invest in the company, which is good news for employees, said outgoing Tembec CEO James Lopez.

“They are going to accelerate and spend that money faster and probably spend more so it’s going to be a stronger company,” he said after the vote.

The transaction announced in May was at risk of being rejected until Rayonier Advanced Materials raised its offer in response to threats from Tembec’s two largest shareholders that they would vote against it.

Oaktree Capital Management LP and Restructuring Capital Associates LP had raised concerns the offer was too low, but agreed to support the deal after the bid was raised.

Lopez said he was confident a deal would get done despite a week of uncertainty.

“I knew that the probability was high that they were going to find a place in the middle,” he added.