SEATTLE – Brookfield Asset Management Inc. plans to buy Longview Fibre Co. for about $1.6 billion, adding nearly 600,000 acres of private tree farms and more than a dozen forest products plants to the Canadian firm’s holdings.
Toronto-based Brookfield would purchase Longview Fibre for $24.75 per share in a deal valued at $1.63 billion. Brookfield also would assume about $518 million in debt, the companies said Monday.
Longview Fibre’s private timberlands – some 588,000 acres in Washington and Oregon – were the primary lure for Brookfield, which already owns or manages 2 million acres of timber in North America and Brazil.
There were no immediate plans to close or downsize Longview Fibre’s large pulp and paper mill in Longview, or its 15 corrugated cardboard plants in 12 states, Brookfield managing partner Sam Pollock said.
“We do have interests in other manufacturing operations, and so we’re comfortable with that side of the business,” Pollock said. “But the main focus in this transaction is the timberlands. That’s where most of the value lies.”
The offer from Brookfield represents an 18 percent premium over Longview’s share price at Friday’s market close. The investment firm presently holds more than 3 million shares of Longview Fibre, about 4.6 percent of the outstanding shares.
Brookfield plans to split Longview Fibre’s timber and paper-products businesses into separate entities, Pollock said. The land produces mostly Douglas fir and hemlock, which is sold in the U.S. and other countries.
Longview Fibre employs about 3,100 people around the country, with most workers at the pulp and cardboard plants and company headquarters in Longview, spokesman Curt Copenhagen said.
The company sold its sole sawmill, near Leavenworth, at the end of last year. The mill employed about 100 people.
Last March, Longview Fibre rejected a buyout offer from Obsidian Finance Group LLC, a private equity firm, and the Campbell Group LLC, a timber investment management company.
The two had offered $26 per share in cash, or about $1.3 billion. After they raised the offer, Longview Fibre announced it was exploring sale alternatives.
D.A. Davidson analyst Steven Chercover said it appears Longview Fibre made the right move, even if management hadn’t initially wanted to sell the company.
McAdams Wright Ragen analyst Paul Latta said Longview’s sale represents “the end of an era” for a company that had been publicly traded for some 80 years.
“Which is not necessarily a bad thing,” he said. “New owners might have a fresh way of looking at things that the former management just didn’t.”
Shares of Brookfield rose $1.01, or 2.1 percent, to close at $49.88 in trading on the New York Stock Exchange. Longview Fibre shares jumped $3.44, or 16.4 percent, to close at $24.45 on the NYSE.
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