Stock in Ainsworth Lumber Co. Ltd. soared more than 30 per cent Thursday, a day after U.S. forestry giant Louisiana-Pacific announced a friendly, $1.1-billion (U.S.) takeover deal for the Vancouver-based maker of products used in housing construction.
On the Toronto Stock Exchange, Ainsworth shares rose 96 cents or 32.65 per cent to $3.90 (Canadian) in morning trading Thursday.
That was above the $3.76 per share Louisiana-Pacific has bid for all the remaining common shares in Ainsworth, itself a 30 per cent premium over the company’s closing price of $2.89 on Sept. 3.
Shares in Ainsworth had closed up 5 cents at $2.94 Wednesday.
Louisiana-Pacific said the deal, announced after markets closed Wednesday, also means it will assume all of Ainsworth’s debt.
“This is an excellent transaction that makes LP more valuable for our customers and our shareholders,” said Louisiana-Pacific chief executive Curt Stevens in a statement.
“Ainsworth has very high quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America.”
The companies said the deal has “unanimous support” from Ainsworth’s board of directions, and from its largest shareholder – Brookfield Asset Management – which owns 54 per cent of Ainsworth’s stock.
The deal, which requires the approval of shareholders, will be voted on during a special meeting next month. It is also subject to regulatory approvals.
According to the statement, the combined companies generated some $2.5-billion (U.S.) in sales on a pro forma basis in the 12 months ended June 30.
Ainsworth is a leading Canadian manufacturer and marketer of oriented strand board, which is used in residential home construction. It has four manufacturing facilities located in Alberta, B.C. and Ontario.Report Typo/Error