This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: DOJ Extends Inquiry into Canadian Lumber Deal

NEW YORK (TheStreet) -- The U.S. antitrust review of Ainsworth Lumber Co. Ltd.'s C$920 million (U.S.$876 million) acquisition by Louisiana-Pacific Corp. has been extended following a refiling.

Ainsworth said Thursday that the antitrust division of the U.S. Department of Justice issued a second request under the Hart-Scott-Rodino antitrust process. The request for additional information on the combination of the building products manufacturers follows a refiling for the antitrust review in October. The companies cited the government shutdown in early October as a cause for delay in getting a DOJ decision on a second request when they refiled their initial HSR application on Oct. 20.

The merger is also under an extended review by competition authorities in Canada, which extended their review on Oct. 23. Ainsworth and Louisiana-Pacific said they will continue to cooperate with the DOJ and declined further comment.

The second request in the U.S. will push the deal's close past the year-end and into the first quarter of 2014.

Antitrust authorities are assumed to be looking at supply channels for structural panels used in residential construction. Both companies are significant players in the oriented strand board market, or OSB, in the Pacific Northwest. OSB is glued and heat-treated product.

In its 10K, Louisiana-Pacific states that the building products markets it is engaged in are highly competitive with players ranging from very large companies to small specialty manufacturers. The market has a global aspect to it and Ainsworth supplies OSB to Japan through its Western Canadian operations.

The merger agreement contemplates the divestiture of one OSB mill of either company located in a province of Canada west of Manitoba with annual capacity of less than 450 million square feet. The deal has the approval of Ainsworth shareholders including Brookfield Capital Partners Ltd., which holds 54% of Ainsworth and agreed to back the deal.

The terms of the transaction include an election of either C$3.76 in cash, 0.235 of a Louisiana-Pacific share, or a mix of C$1.96 and 0.114 of a Louisiana-Pacific share. Brookfield has opted for the final choice. The terms are pro-rated with caps on both the cash and stock consideration. Assuming the fully pro-rated mix, the spread Thursday was 7 cents, or 1.8%. Assuming a Feb. 15 close, that represented an annualized return of roughly 7.8%. --By Scott Stuart in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,953.88 -129.92 -0.76%
S&P 500 1,979.76 -8.22 -0.41%
NASDAQ 4,450.1440 -21.9640 -0.49%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs