TimberWest Forest Corp., Western Canada's largest private timber and land management company, has entered into a purchase agreement with two Canadian pension funds, British Columbia Investment Management Corp. and the Public Sector Pension Investment Board. The purchase price is C$1.03 billion in cash, including assumed debt.
Headquartered in Vancouver, TimberWest owns approximately 808,000 acres of private land and is in the business of selling timber products and real estate. It is traded on the Toronto Stock Exchange under the symbol "TWF.UN."
As part of the definitive agreement, TimberWest has a 60-day "go-shop" period during which it is permitted to solicit a superior proposal. If TimberWest is successful in soliciting a superior proposal during the go-shop period, there will be a break fee of approximately $18 million.
The transaction is subject to regulatory and court approval, as well as an approval vote by 66 2/3% of the unit (share) holders. In the absence of a superior proposal, the transaction is expected to close by the end of June 2011.
BMO Capital Markets acted as financial adviser to TimberWest and the special committee and will be managing the go-shop process on behalf of the company. UBS Securities Canada Inc. acted as independent valuator and financial adviser to the special committee.