Responding to an inquiry by the Holzkurier, West Fraser confirmed that “Banasino Investments filed a ‘13D/A’ with the US Securities and Exchange Commission on February 25, stating that they have acquired 7.8% of West Fraser shares”.
According to Austrian investigative platform Addendum, Banasino Investments Limited “serves Kronospan as a vehicle for many financial transactions”. Until January 2019, Banasino Investments Limited also had an entry in the Austrian commercial register as the sole shareholder of an East Centro Central Management SE (ECCM SE), which managed the financing of Kronospan’s Eastern European subsidiary.
It has not been disclosed how much Banasino Investments paid for the shares. However, West Fraser’s market capitalization is just under CAD 13 billion (€9.42 billion). An 8% stake should therefore be worth around CAD 1 billion or €750 million. Recently, the share price came close to its peak. The lowest price of the past twelve months was CAD 77 per share. On February 25, it reached CAD 123.96 per share and was thus close to the 52-week high (CAD 128.9).
One of West Fraser’s key shareholders is Ketcham Investments, a company controlled by the family of West Fraser Chairman Hank Ketcham. The company holds 7.4 million shares, which account for 10.7% of voting shares. Canadian billionaire Jim Pattison holds an even bigger stake. Pattison is said to own 14% of all West Fraser shares.
West Fraser is the second biggest timber company in the world after Canfor, which became the number one in December 2021. The biggest shareholder of the latter is the Jim Pattison Group which holds a 30% stake.
West Fraser is also a major manufacturer of engineered wood. Since February 1, 2021, the company is the new owner of OSB giant Norbord. It was a US-$3.1 billion deal which resulted in the acquisition of the world’s biggest OSB producer. The timing was perfect: OSB prices recorded an extraordinary increase in 2021.
In 2021, West Fraser sold around 13.6 million m³ of softwood lumber (spruce, pine, fir as well as longleaf pine) as well as 5.7 MMsf (3/8'') of OSB in North America and 1 MMsf (3/8'') in Europe. The production of OSB was added to West Fraser’s business activities after the takeover of Norbord.
The Kronospan group is managed by Peter Kaindl and his son Matthia Kaindl and is headquartered in Nikosia/CY – as is Banasino Investments.
Kronospan describes itself as “one of the leading manufacturers of chipboards, medium-density fiberboards, laminate flooring, UF, MUF and MF resins and wood-based panels, such as OSB. Kronospan also produces special and decorative papers and other associated value-added products”.
Kronospan manufactures engineered wood at more than 40 production site and operates in many countries. Among other things, the company operates four sites in Russia and one in Belarus. Kronospan already has six production sites in the US. The group generates annual sales of around €4 billion and employs over 14,000 people.
The Holzkurier is trying to get a statement from Kronospan as to the strategy it pursues with the stake in West Fraser. As of now, no statement has yet been made.
In its Investor Relations Report, West Fraser explains why investor should own shares:
- financial stability thanks to a product-related and geographically diversified portfolio
- serving of markets with strong economic data
- disciplined and balanced capital allocation
- necessary size and expertise for continued growth
- position allows investors to profit from strong ESG and sustainability goals
- attractive record of creating shareholder value
