WEST FRASER ANNOUNCES SUCCESSSF – GuruFocus.com
VANCOUVER, BC, June 7, 2022 /PRNewswire/ – West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) (TSX and NYSE: WFG) today announced that it has assumed and purchased for cancellation an aggregate of 11,898,205 common shares (“Shares”)) at of US$95.00 per share under its Substantial Issuer Bid (“SIB”) for an aggregate purchase price of approximately US$1.130 billion.
The purchased shares represent approximately 11.7% of the total number of issued and outstanding shares and Class B shares of West Fraser at the time the SIB was announced at the end of April 2022. Including the SIB, West Fraser will have 87,473,547 shares and 2,281,478 Class B shares issued and outstanding. No Class B Shares were purchased under the SIB.
“We are delighted to have successfully completed our second substantial tender offer, which strengthens our track record of returning significant capital to our shareholders. Although we were able to return more than US$1.1 billion to participating shareholders, the fact that the tender offer was not oversubscribed suggests that many of our shareholders still see considerable upside value in our shares,” said Ray Ferris, President and CEO, West Fraser. “West Fraser’s capital allocation priorities seek to balance disciplined investing with returning capital to shareholders, while maintaining our financial flexibility. By executing strategic stock buybacks at a price below our estimate of intrinsic value, we believe we will be able to create significant, long-term value for our shareholders. Given the strength of our balance sheet, we will continue to seek other opportunities to effectively deploy our capital while achieving our strategic objectives, benefiting from the resilience of our geographic and product diversity, and providing our clients with the type wood-based building products that we believe will make a significant contribution to a low-carbon economy. »
Since the completion of the acquisition of Norbord in February 2021the Company repurchased 33,542,183 shares pursuant to the completion of two SIBs as well as normal course issuer bids, representing approximately 27.2% of total shares and Class B shares outstanding at the time of the Norbord acquisition for an aggregate total of approximately US$2.812 billion. During the same period, West Fraser returned approximately $112 million to shareholders through dividends, for a total of approximately US$2.924 billion capital returned to shareholders through redemptions and dividends.
All Shareholders who have made Auction Bids and Purchase Price Bids will have 100% of their successfully tendered Shares purchased by West Fraser at the Purchase Price.
Payment for Shares accepted for purchase under the SIB will be made by Computershare through June 9, 2022 in accordance with the SIB and applicable law. The Company expects to be eligible to resume purchases under its Normal Course Issuer Bid (“NCIB”) after all Shares accepted for purchase under the SIB have been taken up. As part of the resumption of the issuer bid and subject to TSX approval, West Fraser will enter into an automatic stock purchase plan with its broker, which will allow West Fraser to provide standard instructions and buy shares on the open market during self-imposed blackout periods. Outside of these blackout periods, Shares may be purchased at the discretion of management.
For Canadian federal income tax purposes, a deemed dividend arises from the redemption of shares under the SIB. To assist shareholders in determining the Canadian tax consequences of the SIB, West Fraser has determined that for purposes of the Income Tax Act (Canada), the paid-up capital per Share is CA$17.49. West Fraser designates the full amount of the deemed dividend arising from its redemption of the shares under the SIB as an “eligible dividend” for the purposes of the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation.
For the purposes of subsection 191(4) of the Income Tax Act (Canada), the “specified amount” for each Share is US$79.95.
Full details of the SIB are set forth in the Offer to Purchase and Circular dated April 26, 2022together with the related Letter of Transmittal and Notice of Guaranteed Delivery, copies of which have been filed and are available on SEDAR at www.sedar.com and on EDGAR at www.sec.com.
This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell shares of West Fraser.
About West Fraser
West Fraser is a diversified wood products company with more than 60 facilities in Canada, United Statesthe UKand Europe. From responsibly and sustainably managed forest resources, the Company produces lumber, engineered wood products (OSB, LVL, MDF, plywood and particleboard), pulp, newsprint, wood chips, other residues and renewable energy. West Fraser products are used in construction, home repair and remodeling, industrial applications, papers, fabrics and box materials.
This press release contains forward-looking information or statements (collectively, “forward-looking statements”) within the meaning of applicable securities laws, including statements relating to the SIB, including the timing of payment for shares purchased in the framework of the SIB, the creation of long-term shareholder value by repurchasing shares at a price below our estimate of intrinsic value, additional opportunities for capital deployment in the context of achieving our strategic objectives, the timing of stock purchases under the issuer bid and the automatic stock purchase plan and other statements that are not historical facts, are “forward-looking statements” within the meaning of the laws Canadian and United States securities laws. All of these forward-looking statements are based on information currently available to us and are based on assumptions and analyzes we have made in light of our experience and our perception of historical trends and current conditions. Readers should also refer to the risk factors set forth in the Company’s Annual Information Form and MD&A for the year ended December 31, 2021each dated February 15, 2022available on SEDAR (www.sedar.com) and EDGAR (www.sec.gov/edgar.shtml). There can be no assurance that the plans, intentions or expectations on which the forward-looking statements are based will occur. Actual results may differ, and the difference may be material and adverse to the Company and its shareholders.
View original content: https://www.prnewswire.com/news-releases/west-fraser-announces-successful-completion-of-substantial-issuer-bid-extending-record-of-capital-returns-301562411.html
SOURCEWest Fraser Timber Co. Ltd.