Stella-Jones Inc., which makes telephone poles and railway ties, said it is reviewing a proposal to take the company private.
Stella-Jones, which is based in Westmount, Que., said the proposal would see minority shareholders get $3.10 cash a share. Majority shareholder, Stella Jones International SA, which owns about 70 per cent of Stella-Jones, would eventually be left with 100 per cent of the company.
Stella-Jones said an independent committee of its directors has retained investment dealer CIBC World Markets as a financial advisor and expects to make a final report and recommendation on the proposal to the board next week.
Under the proposed transaction, Stella-Jones would be merged with a wholly owned subsidiary of its majority shareholder. Each Stella-Jones share held by minority shareholders would be converted into a redeemable preferred share and then immediately redeemed for $3.10 a share in cash. Stella-Jones said the deal would result in the majority shareholder owning all of the stock.
If the proposed deal is approved by Stella-Jones' board, a special meeting of shareholders will be called to vote on the matter, the company said.
As of June 30, Stella-Jones had about 8.9 million shares outstanding, including nearly 2.7 million shares held by minority shareholders.