Pattison makes offer to take lumber producer Canfor private

VANCOUVER — Shares of Canfor Corp. surged more than 70 per cent in mid-morning trading after a Jim Pattison Group company made a $16 a share bid to take the company private.

Pattison’s Great Pacific Capital Corp., which already owns about 51 per cent of the lumber producer, made the all-cash offer over the weekend that was a 60-percent premium to the company’s 60 day average price and an 81.8per cent premium to Friday’s close.

Canfor shares were trading up $6.37, or 72.4 per cent, at $15.17 on the Toronto Stock Exchange after closing at $8.80 Friday.

Great Pacific says the proposed transaction, which values Canfor at about $2 billion, will allow for the elimination of the significant costs related to maintaining a public company listing and allow for reinvestment of that money in the company’s operations.

It says the company is facing important strategic and capital decisions that it believes are best suited to a private company with a long-term focus.

Canfor says it has formed a special committee of independent directors to review the offer.

RBC Dominion Securities Inc. analyst Paul Quinn said in a note he believes the deal has a high probability of closing as proposed, given how much of the company’s shares The Jim Pattison Group already owns.