Shares in Canfor Corp. fell more than 20 per cent after Great Pacific Capital Corp. failed to win the approval of the company’s minority shareholders and called off its plan to take the lumber producer private.
The company said based on shareholder votes cast by proxy ahead of a Monday deadline, the offer of $16 per share by the Jim Pattison Group company had just 45-per-cent support from the minority shareholders.
A special meeting of Canfor shareholders scheduled for Wednesday was cancelled.
Canfor shares were down $3.56 at $12.00 in early trading on the Toronto Stock Exchange. The stock had traded for $8.80 before Great Pacific made its offer on Aug. 10.
Great Pacific, which holds a 51-per-cent stake in Canfor, said the offer was within a range determined to be fair by a Canfor special committee and its advisers.
“Great Pacific looks forward to Canfor’s continued success and will continue to support the management and directors of the company,” the firm said.
The privatization offer required approval by a two-thirds majority vote by shareholders and a simple majority of the votes cast by shareholders after excluding any votes of Great Pacific and certain others.
Investment management firm Letko, Brosseau & Associates Inc., which controls about a 4.8-per-cent stake in Canfor, said in September that the offer was too low and planned to oppose the deal.
The Canadian Press