DBRS Places TimberWest Under Review with Developing Implications

DBRS has today placed the Issuer Rating of TimberWest Forest Corp. (TWF or the Company) Under Review with Developing Implications following the Company’s announcement that it has entered into a definitive agreement under which two leading Canadian pension funds, British Columbia Investment Management Corporation (bcIMC) and the Public Sector Pension Investment Board (PSP; rated AAA by DBRS), have agreed to acquire TWF for $1.03 billion in cash, including assumed debt.

As part of the definitive agreement, TimberWest has a 60-day “go-shop” period during which it is permitted to solicit a superior proposal. bcIMC and PSP have no right to match a superior proposal made during this period. If TimberWest is successful in soliciting a superior proposal during the go-shop period, there will be a break fee payable to bcIMC and PSP of approximately $18 million. As a result, the rating has been placed Under Review-Developing until there is more clarity on future ownership.

The proposed transaction would be subject to all customary and regulatory approvals. In the absence of a superior proposal, the transaction is expected to close by the end of June 2011.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating the Forest Products Industry, which can be found on our website under Methodologies.