Tembec warns of risk stock price will fall if takeover rejected
Two largest shareholders oppose the deal; looking for a higher offer price.
MONTREAL — Tembec is warning that its shares risk falling if shareholders vote next week to reject a US$807-million friendly takeover offer from Rayonier Advanced Materials.
The deal is opposed by the company’s two largest shareholders, Oaktree Capital Management and Restructuring Capital Associates.
Together the investors control a 37% stake in Tembec, enough to block the transaction which requires support by a two-thirds majority vote of shareholders.
However, Tembec says there is no assurance that another buyer will step forward or would be willing to pay as much if the deal is not approved.
Tembec said no other firm offers have been presented since it began to review its options in 2012 or after the deal with the Florida company was announced in May.
The comments by Tembec came as independent proxy advisory firm Glass Lewis recommended shareholders vote against the deal, saying Oaktree “makes a credible argument” that a higher offer price is justified.
The Rayonier offer for Tembec is $4.05 in cash or 0.2302 of a share in Rayonier Advanced Materials, subject to a cap on the total amount of cash and shares that will be issued.
The friendly offer is 37% above where Tembec’s shares traded before the proposal, but it is less than the $4.22 the shares traded for July 19 (afternoon).