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Proposed Acquisition of Ainsworth (Notes)
12 Months Ended
Dec. 31, 2013
Proposed Acquisition of Ainsworth [Abstract]  
Proposed Acquisition [Text Block]
25.    PROPOSED ACQUISITION OF AINSWORTH LUMBER CO. LTD.

In September of 2013 LP entered into an Arrangement Agreement (the “Arrangement”) with Ainsworth Lumber Co. Ltd., a British Columbia corporation (“Ainsworth”), providing an arrangement under British Columbia law whereby a wholly owned subsidiary of the Company will acquire all of the outstanding shares of Ainsworth capital stock in exchange for 0.114 shares of LP common stock (“LP Shares”) and C$1.94 in cash per Ainsworth common share (“Ainsworth Shares”) subject to certain terms and conditions. Although the Arrangement provides for Ainsworth shareholders to elect among cash consideration, share consideration and mixed consideration, proration provisions will ensure that the aggregate amounts of cash and LP Shares issued in the Transaction are fixed at approximately C$467.0 million and 27.5 million LP Shares, respectively.
The requisite approvals of the Transaction by Ainsworth shareholders and the Supreme Court of British Columbia were obtained on October 29, 2013 and October 31, 2013, respectively. As of the date of this report, the consummation of the Transaction remained subject to other closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of other regulatory approvals and clearances, including under the Canadian Competition Act and the Investment Act of Canada. LP and Ainsworth have agreed to endeavor to cause all closing conditions (including the receipt of regulatory approvals) to be satisfied, which under certain circumstances could require the taking of actions that could adversely affect the value of the Transaction to us.
On February 13, 2014, Ainsworth and LP announced that they have entered into timing agreements with each of the Canadian Competition Bureau (the “CCB”) and the Antitrust Division of the U.S. Department of Justice (the “DOJ”) pursuant to which Ainsworth and LP have agreed, subject to certain conditions, that they will not consummate LP’s acquisition of Ainsworth before March 13, 2014 as the CCB and the DOJ continue their reviews.

As a consequence of the timing agreements described above, Ainsworth and LP also announced that they have agreed to extend the outside date for completion of the Arrangement from March 4, 2014 to April 18, 2014. The Arrangement permits either party to further extend the outside date for two additional 45 day periods if required to obtain certain regulatory approvals.

The closing of the Arrangement remains subject to a number of conditions, including the expiration or termination of the waiting period under the HSR Act and the receipt of other regulatory approvals and clearances including under the Canadian Competition Act. Subject to obtaining required regulatory approvals and clearances and the satisfaction or waiver of other closing conditions, it is now anticipated that the Arrangement will be completed before the end of the second quarter of 2014.

The Arrangement contains certain termination rights for each of LP and Ainsworth. Either party may terminate the Arrangement Agreement if: (i) the parties mutually agree; (ii) the Transaction has not been consummated by March 31, 2014 (subject to extension in certain circumstances); (iii) a governmental authority issues a law or order prohibiting the Transaction; (iv) the other party materially breaches its representations, warranties or covenants such that the applicable closing condition would not to be satisfied; or (v) the other party has incurred a Material Adverse Effect (as defined in the Arrangement Agreement).

LP expects to fund the purchase price payable in the Transaction and related fees and expenses through a combination of cash on hand at LP and Ainsworth and borrowings under our revolving credit facility. The obligations of the lenders to provide debt financing under the debt commitments are subject to customary conditions.
On October 17, 2013, Ainsworth issued a press release announcing that it had received the requisite consents in connection with its consent solicitation (the "Consent Solicitation") from holders of Ainsworth's 7.5% Senior Secured Notes due 2017 (the "Notes") . The press release also announced that Ainsworth has entered into a supplemental indenture relating to the Notes, which modified certain definitions in the indenture relating to the Notes (the "Indenture") so that the consummation of the Transaction pursuant to the Arrangement Agreement, and the designation by LP of members of Ainsworth’s board of directors upon and after the consummation of the Transaction, will not constitute a “Change of Control” under the Indenture and Ainsworth will not be required to make a “Change of Control Offer” under the Indenture in connection with the Transaction. Subject to the satisfaction or waiver of the conditions set forth in the solicitation statement distributed by Ainsworth to holders of the Notes, LP will make the consent payments contemplated thereby as and when they become due. Promptly following the consummation of the Transaction, LP will unconditionally guarantee the prompt payment and performance of the obligations of Ainsworth under the Indenture and the Notes.

The Transaction is expected to have a material effect on LP’s consolidated financial position, results of operations and cash flows. For additional information, see the Ainsworth Lumber Co. Ltd. Notice of Special Meeting and Management Proxy Circular furnished as Exhibit 99.1 to LP's Current Report on Form 8-K dated September 30, 2013.