TimberWest says pension fund bid still the best

Tue Jun 7, 2011 9:40am EDT
 
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TORONTO (Reuters) - TimberWest Forest Corp said on Tuesday a C$1.03 billion ($1.06 billion) takeover bid from two Canadian pension funds was the best one available, as it failed to raise a superior offer during a 60-day solicitation.

TimberWest, which sells timber from the nearly 328,000 hectares (810,000 acres) on Vancouver Island, had agreed on April 11 to the takeover by the British Columbia Investment Management Corp and the Public Sector Pension Investment Board. But it had 60 days to solicit a higher proposal from third parties.

During the process, TimberWest's financial adviser, BMO Capital Markets, contacted 31 parties, including five that entered standstill and confidentiality agreements, and set a deadline for offers.

"That date has now passed and no superior proposal has been received, and the company and BMO Capital Markets are no longer in active dialogue with any prospective purchaser," TimberWest said in a statement.

British Columbia Investment Management Corp and the Public Sector Pension Investment Board offered TimberWest unitholders C$6.48 per unit in cash, a 19.6 percent premium to the company's trading price on the previous day.

TimberWest units closed at C$6.12 each on Monday.

The takeover offer for TimberWest, which also has logging rights on provincial forests in the region, comes at a time when Canada's forestry sector is rebounding, thanks largely to increased sales to Asia.

The TimberWest board had previously endorsed the pension funds' offer.

It said on Tuesday that independent proxy advisory firms ISS Governance Services and Glass Lewis & Co. had each recommended that TimberWest unitholders vote in favor of the proposed transaction.

(Reporting by Pav Jordan; Editing by Frank McGurty)