A report suggested that CVC Capital and wood panel manufacturer Kronospan had submitted a joint expression of interest to purchase.
Analyst Paul Quinn of RBC Dominion Securities says there could be “material hurdles” to clear before any transaction could occur.That’s because West Fraser filings says certain corporate transaction may require approvals from class B shares, which are at least 91 per cent held by the Ketcham family. Billionaire Jim Pattison owns at least nine per cent of common shares.Article content
Quinn also said there could be competition issues related to European OSB concentrations since Kronospan controls about 40 per cent of the market and West Fraser 12 per cent. “As a result, we expect that a transaction would come under scrutiny from the relevant competition authorities and potentially require divestment of West Fraser’s European OSB assets.”West Fraser produces lumber, engineered wood products, pulp, newsprint, wood chips, other residuals, and renewable energy. West Fraser’s products are used in home construction, repair and remodelling, industrial applications, papers, tissue, and box materials.
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