TimberWest Approves Pension Fund Takeover

(June 15, 2011) – Shareholders of Canadian timber and land management giant TimberWest Forest Corporation voted to approve a $1.03 billion takeover by the British Columbia Investment Management Corporation (BCIMC) and the Public Sector Pension (PSP) Investment Board.

“We look forward to a new future as a private company,” TimberWest president Paul McElligott told the Vancouver Sun. “I think private ownership is more patient capital; it’s a longer-term view. You are not under the same kind of pressures to shore up short-term income and profits because there’s a quarterly analyst’s report being produced in a few weeks.”

The margins of support for the takeover were near total. Overall, 98% of shareholders voted to approve the sale.

TimberWest had received the bid from the two public pension funds on April 11 with the stipulation that the company would have 60 days to solicit a higher proposal from a third party. That 60-day “go shop” ended June 9 without any superior offers.

The $1.03 billion bid by BCIMC and PSP is equivalent to $6.16 per unit, including debt. TimberWest’s board had previously endorsed the pension funds’ offer.

BCIMC is an asset manager whose clients include public sector pension plans, insurance funds, and public trust. PSP manages the pension plans of the Public Service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force. Together, the two pension plans manage about $150 billion. They will each have a 50% stake in the company when the acquisition formally closes this month.

TimberWest is western Canada’s largest private timber and land management company. It owns approximately 808,000 acres of land. It sells timber and real estate.

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 the alternative.