Billionaire Pattison Pulls Canfor Bid As Shareholders Balk

(Bloomberg) -- Billionaire Jim Pattison scrapped his bid to take Canfor Corp. private after minority shareholders in the Canadian lumber company rejected the offer as too low given the turnaround in the sector.

Investors voted 45% in favor of the C$16 a share offer, according to a tally of votes cast Monday, Canfor said in a statement. The buyout required a majority of the minority shareholders. Glen Clark, president of The Jim Pattison Group, said in an interview before the vote that the company had no plans to increase the bid.

The shares slumped as much as 24% to C$11.79 at 9:32 a.m. in Toronto, the biggest intraday decline in records going back to 1983, according to data compiled by Bloomberg.

The Pattison Group, through its subsidiary Great Pacific Capital Corp., launched a C$981.6 million ($746 million) bid to take Canfor private in August, taking advantage of a tumbling share price to buy out the remaining shareholders. Great Pacific owns 51% of the stock.

Investors including money manager Letko Brosseau & Associates Inc. had voiced their displeasure at the deal, calling it “opportunistic,” and not reflecting the full value of the company.

The bid was launched when lumber futures were depressed and the sector’s stocks had dropped due to forest fires, reduced U.S. demand and lower supplies from a pine beetle infestation. Pattison’s offer was an 82% premium to the closing price on Aug. 9, a day before the bid. The stock traded Monday at C$15.56 in Toronto, below Pattison’s offer.

The industry rebounded in the fall after lumber companies curtailed supplies and the U.S. housing market recovered. Lumber futures in Chicago have climbed 33% from market lows in June to over $400 per 1,000 board feet.

To contact the reporters on this story: David Scanlan in Toronto at dscanlan@bloomberg.net;Ashley Robinson in Winnipeg (Non BLP Loc) at arobinson193@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, David Scanlan, Esteban Duarte

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