Financial Reports & Markets
West Fraser completes substantial issuer bid; extends record of capital return
June 16, 2022 By P&PC Staff
West Fraser Timber Co. Ltd. has taken up and purchased for cancellation a total of 11,898,205 common shares at a price of US$95.00 per share under its substantial issuer bid (“SIB”) for an aggregate purchase price of approximately US$1.130 billion.
The shares purchased represent approximately 11.7 percent of the total number of West Fraser’s issued and outstanding shares and Class B shares at the time the SIB was announced in late April 2022. After giving effect to 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 pleased to have successfully completed our second Substantial Issuer Bid, furthering our track record of returning significant capital to our shareholders. While 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 of West Fraser.
“West Fraser’s capital allocation priorities aim to balance disciplined investing with returning capital to shareholders, all while maintaining our financial flexibility. By executing strategic share repurchases at a price below our estimate of intrinsic value, we are confident that we will be able to create significant, long-term value for our shareholders. Given our strong balance sheet, we will continue to look for additional opportunities to effectively deploy our capital as we execute on our strategic objectives, benefit from the resilience of our product and geographic diversity and provide our customers with the type of wood-based building products that we expect will be important contributors to a low-carbon economy.”
All shareholders who made auction tenders and purchase price tenders will have 100 percent of their successfully tendered shares purchased by West Fraser at the purchase price.
Payment for the shares accepted for purchase under the SIB will be effected by Computershare by June 9, 2022 in accordance with the SIB and applicable law. The company expects to be eligible to recommence purchases under its normal course issuer bid after all shares accepted for purchase under the SIB have been taken up.
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