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West Fraser Timber Co Ltd T.WFG

Alternate Symbol(s):  WFG

West Fraser Timber Co. Ltd. is a diversified wood products company. The Company is engaged in manufacturing, selling, marketing and distributing lumber, engineered wood products, including oriented strand board (OSB), laminated veneer lumber (LVL), medium-density fiberboard (MDF), plywood, particleboard, pulp, newsprint, wood chips and other residuals and renewable energy. Its products are used in home construction, repair and remodeling, industrial applications, paper, tissues, and box materials. Its segments include Lumber, North America engineered wood products (NA EWP), Pulp & Paper and Europe EWP. Its business comprises lumber mills, OSB facilities, renewable energy facilities, pulp and paper mills, plywood facilities, MDF facilities, particleboard facilities, LVL facility, treated wood facility, and veneer facility. The Company operates approximately 58 facilities in Canada, the United States, the United Kingdom and Europe. It also offers wood preservation services.


TSX:WFG - Post by User

Comment by dosperroson Feb 12, 2021 4:57pm
99 Views
Post# 32556118

RE:RE:RE:Amazing Q4 results

RE:RE:RE:Amazing Q4 resultsYes.  That was a question asked by one of the analysts in the CC today, along the lines of "as you are largely cash-positive...."

Pro forma combined net debt after Q3 was $946M.  With WFT coming in a $544M in Q4 and OSB doing $380 or so, that largely takes care of it.  Page 22 below.

https://www.westfraser.com/sites/default/files/presentations/pdfs/West%20Fraser%20Norbord%20Investor%20Presentation.pdf

It's not what I expected, but I was lazy and didn't read the 300 page deal that came in the mail.  I along with many here expected BAM with their 43% in Norbord to gift themselves a massive Q4 special div.  I was really surprised seeing the paltry $0.60/share issued.

It turns out they have a proviso that will restrict both companies pre-merger from "excess dividends" defined at $0.60 for OSB and $0.30 for WFT.  They could do what they wish of course, but there was a mathematical penalty that would adjust the exchange ratio down from 0.675 if that happened.  So the incoming entities came in with full bank accounts,.  I suppose it makes sense and may imply Brookfield is sticking around, and it also pays for the 2021 NCIB they announced.  They'll need at least $600M to buy back that 5%, likely as much as $900M if my thinking on where this may go is correct.

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