VANCOUVER—Stock in Ainsworth Lumber Co. Ltd. soared more than 30 percent today—a day after U.S. forestry giant Louisiana-Pacific announced a friendly, $1.1-billion (U.S.) takeover deal for the Vancouver-based maker of products used in housing construction.
Ainsworth shares rose 96 cents, or 32.65 percent, to $3.90 in morning trading on the Toronto Stock Exchange.
That was above the $3.76 (Cdn.) per share Louisiana-Pacific has bid for all the remaining common shares in Ainsworth—itself a 30 percent premium over the company’s closing price of $2.89 (Cdn.) on Sept. 3.
Shares in Ainsworth had closed up five cents at $2.94 (Cdn.) yesterday.
Louisiana-Pacific said the deal also means it will assume all of Ainsworth’s debt.
“This is an excellent transaction that makes LP more valuable for our customers and our shareholders,” Louisiana-Pacific chief executive Curt Stevens said in a statement.
“Ainsworth has very high-quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America,” he noted.
The companies said the deal has “unanimous support” from Ainsworth’s board of directions and from its largest shareholder—Brookfield Asset Management, which owns 54 percent of Ainsworth’s stocks.
The deal, which requires the approval of shareholders, will be voted on in a special meeting next month.
It also is subject to regulatory approvals.
According to the statement, the combined companies generated roughly $2.5 billion (U.S.) in sales in the last 12 months ended June 30, on a pro forma basis.