Monday, December 29, 2025
Canfor Corporation (TSX: CFP) (“Canfor Corp”) and Canfor Pulp Products Inc. (TSX: CFX) (“Canfor Pulp”) has recently announced that they have entered into an arrangement agreement (the “Arrangement Agreement”), under which Canfor Corp will acquire all of Canfor Pulp’s issued and outstanding common shares (each, a “Canfor Pulp Share”) that are not already owned by Canfor Corp and its affiliates. This acquisition will be carried out through a court-approved plan of arrangement under the Business Corporations Act (British Columbia) (the “BCBCA”) (the “Transaction”). As per the terms of the Arrangement Agreement, Canfor Pulp shareholders (excluding Canfor Corp and its affiliates) will have the option to receive, for each Canfor Pulp Share held, either 0.0425 of a Canfor Corp common share (the “Share Consideration”) or $0.50 in cash (the “Cash Consideration,” together with the Share Consideration, the “Consideration”).
Canfor Corp currently owns approximately 54.8% of the issued and outstanding Canfor Pulp Shares. The $0.50 per Canfor Pulp Share represents a premium of 25% to Canfor Pulp’s closing share price on December 2, 2025, on the Toronto Stock Exchange (“TSX”) and a premium of 38% based on the 10-day volume-weighted average share price of Canfor Pulp as of December 2, 2025, on the TSX.
Transaction Rationale for Canfor Pulp
In determining that the Transaction is in the best interests of Canfor Pulp, the board of directors of Canfor Pulp (the “Canfor Pulp Board”) considered a number of factors, including:
• Consideration reflects a premium to market price. The $0.50 per Canfor Pulp Share represents a premium of 25% to Canfor Pulp’s closing share price on December 2, 2025, on the TSX and a premium of 38% based on the 10-day volume-weighted average share price of Canfor Pulp as of December 2, 2025, on the TSX.
• Certainty of Cash Consideration. The option to receive Cash Consideration for their Canfor Pulp Shares provides Canfor Pulp Shareholders with immediate and certain value.
• Value proposition of Share Consideration. The Share Consideration being offered provides Canfor Pulp
Shareholders the opportunity to participate in the combined business of Canfor Corp and Canfor Pulp (the
“Combined Company”) after completion of the Transaction. The value of the combined business of the Combined Company after completion of the Transaction may benefit from, among other things, expanded ability to access capital and operational cost synergies.
• Independent valuation of Consideration. The formal valuation of Stifel Nicolaus Canada Inc. (“Stifel”), as independent financial advisor and independent valuator to the Canfor Pulp Special Committee (as defined below), provides that in Stifel’s opinion, as at December 3, 2025, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the fair market value of the Canfor Pulp Shares is in the range of $0.08 – $0.52 per Canfor Pulp Share.
• Review of strategic alternatives and Canfor Pulp’s business, financial condition and industry risks. The Canfor Pulp
Special Committee considered, with the assistance of its financial and legal advisors, (i) current and forecasted liquidity needs of Canfor Pulp and the ability of Canfor Pulp to obtain adequate financing sources, including in light of its current debt levels and related covenant relief under its operating loan facility, (ii) uncertainty related to the business, financial condition and prospects of Canfor Pulp, including the challenges broadly affecting the pulp industry, and (iii) the relative benefits and risks of various strategic alternatives reasonably available to Canfor Pulp, including remaining as an independent public company.
Boards of Directors’ Approvals and Independent Special Committees’ Recommendations
In connection with the evaluation of the Transaction, the Canfor Pulp Board formed a special committee of independent directors (the “Canfor Pulp Special Committee”), with independence determined in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Canfor Corp Board also formed a special committee of independent directors (the “Canfor Corp Special Committee”).
Upon the recommendation of the Canfor Corp Special Committee, and after receiving financial and legal advice, the Canfor Corp Board, excluding certain directors who recused themselves and did not vote on the matter, approved the Transaction and the Arrangement Agreement and determined that the Transaction is in the best interests of Canfor Corp. Canfor Corp shareholder approval is not required for the Transaction.
Read more news on: pulp & paper, sustainability, wood industry, forestry
Get more updates on American woodworking industry through: www.woodandpanel.us
Tags: acquisition, canfor, collaboration, Forestry, pulp & paper, woodworking
Comments: