TimberWest Looks Ready to Settle for Original Pension Suitors

(June 7, 2011) – Canadian timber and land management giant TimberWest Forest Corporation announced that its 60-day search for a superior bid had proven fruitless and that the original $1.03 billion offered by two Canadian public pension plans is the best it expects to receive, according to a press release from the company.

TimberWest agreed to British Columbia Investment Management Corporations (BCIMC) and the Public Sector Pension (PSP) Investment Board’s $1.03 billion offer on April 11 with the stipulation that TimberWest could have 60 days to solicit a higher proposal from a third party. The 60-day “go shop” period will end on Thursday.

“While it is still possible that a superior proposal will emerge prior to June 9, 2011, the company does not expect this to occur,” TimberWest said in the release.

TimberWest’s financial advisor, BMO Capital Markets, contacted 31 parties during the “go shop” period and entertained offers from five that entered standstill and confidentiality agreements. Under the original $1.03 billion deal TimberWest shareholders would receive $6.16 per unit, representing a 19.6% premium over to the company’s trading price on the day before the deal was offered. TimberWest’s stock is currently trading at $6.09.

TimberWest is set to hold an annual general and special meeting of stockholders next Tuesday in Vancouver to vote on the proposed takeover by BCIMC and PSP. The TimberWest board had previously endorsed the pension funds’ offer.

Timber products in general are currently enjoying a healthy market, with pension funds moving capital into this space to take advantage of heavy Asian demand. The Alberta Investment Management Company (AIMco) and the San Diego Country Employee Retirement Association (SDCERA) have both recently made significant moves into this space, for example.