MONTREAL, QC – Two of the largest shareholders of Tembec Inc. have said they will not support the proposed acquisition by Rayonier Advanced Materials Inc. unless the company improves its offer.
Oaktree Capital Management LP, which owns 19.9 per cent of the Canadian forest products company, said it would vote against Rayonier’s US$807-million acquisition offer.
Days later, Restructuring Capital Associates L.P. announced that it expects to vote against the proposed merger at the Tembec shareholders’ meeting scheduled for July 27, 2017.
Tembec provided an update to shareholders in response to the recent public broadcast solicitation by Oaktree Capital Management, reiterating that a comprehensive and rigorous sale process was conducted for the sale of the whole or parts of Tembec, and that no third party has made or communicated any intention to make an alternative acquisition proposal since the announcement of the Rayonier transaction. The Tembec board of directors recommends that shareholders vote for the acquisition.
James Bennett, the founder of Restructuring Capital Associates, said in a press release:
“We have held shares in Tembec for almost a decade and are highly supportive of management and the board of directors. They have done a terrific job in turning around the company into a profitable and growing enterprise. While they support the Rayonier merger, we are not prepared to vote for the transaction unless Rayonier responds more appropriately to the points made by Oaktree. The strategic merit of this unique combination can improve profitability exponentially and Oaktree makes a compelling case that Rayonier can and should improve its offer.”
Tembec owns lumber, pulp, specialty cellulose and paper manufacturing operations located mainly in Canada, a specialty cellulose operation in France, and a chemicals operation in the United States.