BMO take BMO Capital Markets analyst Mark Wilde breaks down the West Fraser Timber (OTCPK:WFTBF)-Norbord (NYSE:OSB) deal announced yesterday.
"We think the deal is a win-win for both sets of shareholders. The combination creates a large and diversified wood products firm. Both firms are well-run, have low-cost assets, and best-in-class margins. The combined entity will have substantial torque to an upturn in US housing. A pristine balance sheet provides financial flexibility."
The firm lifts its price target on West Fraser to C$86 from C$82 and keeps an Outperform rating in place.