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Thursday, May 19, 2022

Why Did The West Fraser (WFG) Stock Rise Nearly 11% On Wednesday?

West Fraser Timber Co. Ltd. (WFG) has advanced 10.74% at $88.84 in the current market on the last check Wednesday after announcing the commencement of a substantial issuer bid. The stock of West Fraser (WFG) completed the previous trading session at $80.22.


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Which offer WFG has been making?

West Fraser (WFG) declared today that its Board has supported the beginning of a significant issuer bid (the “Offer”). In accordance with that WFG will present to buy from investors for crossing out to US$1.25 billion of its outstanding Common shares.

The Offer will continue via a “modified Dutch auction” methodology with a delicate cost range from US$80.00 to US$95.00 per Share, addressing a 1% rebate to a 17% premium over WFG’s volume-weighted normal cost on the New York Stock Exchange over the last 20 exchanging days.

Term of the Offer

  • WFG Board has approved the Offer, which will initiate on April 26, 2022, and lapse on June 2, 2022, except if expanded or removed.
  • West Fraser plans to support repurchases of Shares through accessible money available.
  • The Offer is named in United States dollars and Shareholders will get payments in United States dollars, while Canadian Shareholders may, at their choice, choose to get payments in Canadian dollars.

Price tag

Upon lapse of the Offer, WFG will decide on the most minimal price tag (which will be at least US$80.00 per Share and not more than US$95.00 per Share) that will permit it to buy the greatest number of Shares appropriately offered to the Offer, and not appropriately removed, having a total price tag not surpassing US$1.25 billion.

Assuming that Shares with a total price tag of more than US$1.25 billion are appropriately offered and not appropriately removed, West Fraser will buy the shares on a pro-rata premise in the wake of giving impact to “odd lot” tenders, which won’t be likely to supportive of pro-ration.

What else WFG has pronounced?

West Fraser (WFG) has suspended share repurchases under its normal course issuer bid (“NCIB”), and no NCIB buys will be made until after the termination of the Offer, if and when WFG decides to recommence repurchases under the NCIB. The Offer isn’t contingent upon any base number of WFG Shares being offered however is dependent upon different circumstances that are regular for an exchange of this sort.

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