Control of market worth paying high price for Canexus?
Canexus is run by a bunch of fools. There are completely incompentent. Calling these people stupid is a disservice to stupid people. They have 34 million in revolving credit facility left to run the company and asking for an extension, just so they can get to transition. Pathetic. This company would go bankrupt in short order.
Superior could very well have a better deal than what they paid. The things we don't see is other competitors fighting for Canexus assets, which in my opinion are state of the art assets as they have had significant upgrades to new technology in recent years North shore plant upgrate was 280 million alone. Yes Superior could have waited and watched Canexus crumble more only to loose out to another competitor as vultures pick over the carcass. So yes the paid too much an there will be some growing pains as they almalgamate. When looking at the numbers if you take away the impairment charges and account for the say 40 million in synergies you do end up with a profitable venture not to mention removing a competitor. I feel that layoffs will also happen in the future. Basically you are paying 200 million per plant which is at least market value. I would propably cost north of 1.5 billion minimum to build the assets they are getting. Superior really has their work cut out for them. It will be an interesting next few years.