Florida-based Rayonier decided to revise its terms on Sunday and increase its offer for the acquisition of Montreal-based Tembec by 17 per cent. Oaktree Capital Management and Restructuring Capital Associates (RCA) said last week that they would not support the takeover unless Rayonier upped its price for shareholders.
Rayonier is now offering shareholders a choice of either $4.75CAN per Tembec share from $4.05 originally or 0.2542 shares of Rayonier common stock per Tembec common share subject to proration so that approximately 67 per cent of the aggregate consideration is paid in cash and approximately 33 per cent is paid in Rayonier common stock.
“This combination will enable us to sustainably grow our business for the benefit of our customers, employees and communities. We are, of course, pleased with the opportunity to deliver even greater value to our shareholders,” said James Lopez, president and chief executive officer of Tembec.
Oaktree and RCA together make up 37 per cent of Tembec’s shares. Since the acquisition requires support from two-thirds of Tembec’s shareholders, their announcement last week caused tension as they have the power to make or break the entire deal.
“This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return,” said Paul Boynton, chairman, president and chief executive officer of Rayonier Advanced Materials. “We look forward to working with Tembec’s exceptional team, unions and other stakeholders to realize the abundant opportunities ahead.”
Rayonier and Tembec announced the friendly acquisition plan in May, promising to keep Tembec’s Canadian operations running.
Tembec shareholders will be voting at a meeting on Thursday.