Canadian paper producer Tembec Inc.’s sale to Rayonier Advanced Materials Inc. has moved a step closer after its two biggest shareholders finally agreed terms.
The deal with the Florida-based real estate trust, which was announced in May, has been on hold due to Oaktree Capital Management and Restructuring Capital Associates not supporting the price that was originally agreed.
Their stance has resulted in Rayonier now offering Tembec investors $4.75 in cash per share, an increase of 17% on the earlier valuation – and an acceptable price for the two primary shareholders.
This represents a 61 percent premium over the closing price on May 24, the last day of trading prior to the original deal being announced.
“They reached out to us at the end of last week, and we had some constructive and professional dialogue,” said Rayonier Chief Executive Office Paul Boynton.
“It was a positive dialogue and, yes, we increased our offering.”
Tembec manufactures other forest products including lumber, pulp and high purity cellulose and is a global leader in sustainable forest management practices.
It currently employs approximately 3,000 workers in Canada and France, achieving an annual turnover of $1.5bn.
“Rayonier Advanced Materials is the ideal partner for us, given the complementary nature of our products, expertise, and resources,” commented James Lopez, President and Chief Executive Officer of Tembec, in May.
“They are committed to our operations and employees in Canada and France and - above all - to the values we share.”