Tree Frog Forestry News

Paul Quinn’s muses on a Canfor, West Fraser Merger

May 17, 2017
Category: Today's Takeaway

Recent activity at West Fraser, highlighting Jim Pattison’s forest sector holdings, “brings up the idea of Canfor and West Fraser coming together”, says RBC’s Paul Quinn in a research note to clients (Vancouver Sun). Although there is no suggestion that a merger is even being considered, Quinn notes Pattison “obviously likes the sector and has a history in forest companies that merge”. Although a merger—which would create the world’s largest lumber company—“would make some sense” says Quinn, given reduced timber harvests in BC, analyst Kevin Mason (of ERA) says it would “likely be a non-starter for government due to trade and concentration of ownership hurdles”.

Greenpeace claims victory over Resolute in decision by a Georgian Court transferring their lawsuit to California. Greenpeace wants the case heard where “most of the defendants live and work”, while Resolute prefers Georgia, “where its US operations are”. Although Greenpeace claims the decision supports their view that Resolute’s actions “are characteristic of a SLAPP lawsuit”, their release (and a related story in Phys.org) reads more like the same-old, same-old to us.

Finally, FPAC welcomes the new transportation legislation tabled by government. CEO Derek Nighbor says “transportation costs represent about 1/3 of total costs for the average forest products company”. FPAC looks forward to working with government to maximize opportunities with this legislation.

— Kelly McCloskey, Tree Frog Editor