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No cause for concern, analysts say of Norampac


September 19, 2006
By Pulp & Paper Canada

Fears that Norampac might be sold in the wake of the Domtar/Weyerhaeuser merger aren’t grounded in economic practic…

Fears that Norampac might be sold in the wake of the Domtar/Weyerhaeuser merger aren’t grounded in economic practicality, Canadian Press reported analysts as saying. The company is profitable, and as a result, there are no acute reasons for Domtar to divest its stake in Norampac, analysts say.

“Norampac is profitable in its own right and Domtar would be quite happy just to take the dividends,” CP reported Stephen Atkinson of BMO Capital Markets Canada as saying. “Domtar has to want to sell it I don’t see that happening any time soon unless Domtar had another need for cash, which they don’t.”

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This runs somewhat contrary to what Domtar confirmed shortly after news of its merger with Weyerhaeuser broke. At that point, CEO Raymond Royer said of Norampac, “in due course, when the price is right we may dispose of that asset.”


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