VICTORIA, April 11 /CNW/ - British Columbia Investment Management
Corporation ("bcIMC") and Public Sector Pension Investment Board ("PSP
Investments") announced today that they have entered into a definitive
agreement to acquire TimberWest Forest Corp. ("TimberWest") (TSX:
TWF.UN). bcIMC and PSP Investments are large independent Canadian
institutional investors who invest on behalf of Canadian pension plans.
Under the terms of the arrangement agreement, holders of stapled units
of TimberWest ("Unitholders") will receive a purchase price of Cdn.
$6.48 in cash on closing of the transaction for each stapled unit owned
today. The price represents a premium of 25 per cent to the 20-day
weighted average trading price of the stapled units on the TSX as of
April 8, 2011.
Prior to closing, each stapled unit outstanding today will be entitled
to receive a distribution of 0.0516 stapled units, representing
deferred interest on subordinated notes. After taking into account
this issuance of additional stapled units, Unitholders will hold 1.0516
stapled units for each stapled unit held today and the purchase price
will be $6.16 per stapled unit. The transaction values the fully
diluted stapled units of TimberWest at approximately Cdn. $910 million,
and the total transaction at Cdn. $1.03 billion when including the
assumption of outstanding debt.
As a consequence of the transaction, all convertible debentures not
converted and that remain outstanding on closing will thereafter be
convertible into the same amount of cash that they would have received
under the arrangement as if they had been converted into stapled units
as of the closing of the arrangement.
The transaction has been unanimously approved by the independent
directors of TimberWest, who are recommending that Unitholders approve
the arrangement at a meeting of Unitholders to be held on or about June
14, 2011. The independent directors formed a special committee that
has determined that the transaction is fair to Unitholders and in the
best interests of TimberWest. BMO Capital Markets and UBS Securities
Canada Inc. have each provided their opinion that the offer is fair,
from a financial point of view, to Unitholders (other than bcIMC).
"We are pleased to have reached agreement to acquire TimberWest on terms
that provide fair value, immediate liquidity and a premium to
TimberWest's Unitholders," said Doug Pearce, Chief Investment Officer
of bcIMC. bcIMC has been a significant investor in TimberWest since
February 2009, and today has an effective interest of 22.5 per cent in
TimberWest through its ownership of convertible debentures.
"We look forward to placing TimberWest and its unique assets in the
hands of stable, well-funded Canadian pension plans that seek to
realize the fullest value from their investments over the long-term,"
said Gordon J. Fyfe, President and Chief Executive Officer of PSP
The successful acquisition of TimberWest would meet an investment
strategy common to bcIMC and PSP Investments to acquire companies that
have the potential to generate investment returns that meet the
long-term requirements of pension plans. Both bcIMC and PSP
Investments view the acquisition of TimberWest as a complement to
traditional asset classes, as timber and real estate exhibit
inflation-hedging characteristics and provide stable risk-adjusted
returns, attributes which are particularly well-matched to the needs of
If the Unitholders approve of the transaction and regulatory approvals
are obtained, TimberWest will be controlled by two large Canadian
institutional investors, both of whom are established members of the
investment community and both of whom have a long-term outlook. bcIMC
and PSP Investments both operate independently from government. bcIMC
and PSP Investments intend, as the owners of TimberWest, to work with
management to promote the sustainable long-term growth of TimberWest's
business. No fundamental changes in the operations of the business are
anticipated. It will be business as usual on the ground and existing
operating systems and processes will remain in place.
TimberWest Forest Corp. is uniquely positioned as western Canada's
largest private timber and land management company. The Company owns in
fee simple approximately 327,000 hectares or 808,000 acres of private
land and is in the business of selling timber products and real estate.
For more information, visit www.timberwest.com
bcIMC is an independent investment management corporation based in
Victoria, British Columbia that manages a global investment portfolio
of more than $86 billion as at December 31, 2010. Supported by
industry-leading expertise, bcIMC invests in all major asset classes
including infrastructure and strategic assets. bcIMC's clients include
public sector pension plans, insurance funds and public trusts. bcIMC
operates independently from government. For more information, visit www.bcimc.com.
About PSP Investments
PSP Investments is a pension investment manager operating at arm's
length from government. PSP Investments manages investments for the
pension funds of the Public Service, the Canadian Forces, the Royal
Canadian Mounted Police and the Reserve Force. PSP Investments'
statutory objectives are to manage funds entrusted to it in the best
interests of the contributors and beneficiaries of the pension plans
and to maximize investment returns without undue risk of loss having
regard to the funding, policies and requirements of the plans and their
ability to meet their financial obligations. For more information visit
SOURCE British Columbia Investment Management Corporation (bcIMC)
For further information:
TimberWest Forest Corp.
Chief Financial Officer
Manager, Corporate Initiatives
Public Sector Pension Investment Board
Vice President, Communications and Government Relations