Fairfax Financial Holdings exits Tembec

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By Ted Liu

Fairfax Financial Holdings Limited (TSX: FFH, FFH.U) has sold, through its subsidiaries, 14,235,644 common shares of Tembec Inc. (TSX: TMB), representing approximately 14.2% of the issued and outstanding shares. The shares were sold on June 19, 2017 over the facilities of the Toronto Stock Exchange (TSX) at an average price of approximately $4.30 per share.

Fairfax said it sold the shares to benefit from the recent appreciation of the market price of the Tembec shares. Following the sale, Fairfax and its subsidiaries, hold no shares in Tembec.

Fairfax sold 2,633,350 common shares of Tembec Inc. between June 2nd and 9th at an average price of approximately $4.35 per share and 3,122,050 common shares of Tembec between June 12th and 15th at an average price of approximately $4.30 per share.

On June 12, 2015, Fairfax, through its subsidiaries, acquired 19,991,044 common shares of Tembec, representing approximately 19.9% of then issued and outstanding shares, by way of a private transaction at a price of $2.25 per share. The exit represents an IRR of approximately 38%.

On May 25, 2017, Rayonier Advanced Materials Inc. (NYSE: RYAM) entered into a definitive agreement to acquire Tembec. Tembec shareholders will have the right to elect to receive either (i) $4.05 in cash or (ii) 0.2302 of a share of Rayonier Advanced Materials common stock, for each Tembec common share.

photo credit: Fairfax