The announcement that Resolute Forest Products Inc. (NYSE: RFP) will be acquired by the private pulp and paper conglomerate Paper Excellence Group drove a substantial surge in RFP shares. They increased in price by more than 60% in the auction on July 7, and the shares corrected to $19.9 at the sale on July 8.
Resolute Forest Products Inc. (RFP) stockholders will get $20.5 in cash for each share of the firm under the terms of the deal. RFP & Paper Excellence Group’s total transaction value is projected to be $2.7 billion.
Resolute Forest Products Inc. (RFP) stockholders will also get contingent rights to a $500 million tax lien refund for softwood lumber in the second quarter.
Paper Excellence Group plans to merge Resolute Forest Products Inc. (RFP) with Domtar, a newly formed subsidiary of its packaging company. The combination will enable the corporation to diversify its activities and carry out its development goals.
The privately held Paper Excellence Group presently controls a variety of pulp and paper enterprises in the Americas and Europe. The addition of Resolute Forest Products Inc. (RFP) will strengthen its North American manufacturing network.
The firm has benefited from the increased demand for paper, notably folding boxboards, as a result of the expansion of e-commerce. As a result, the purchase of Resolute Forest Products Inc. (RFP) is consistent with the Paper Excellence Group’s goal of expanding its current pulp, paper, packaging, timber, and fabric businesses.
Subject to shareholder and regulatory clearance, the merger is scheduled to close in the first half of 2023.
Resolute Forest Products Inc. (NYSE: RFP) shares are 31.63% up in the year-to-date (YTD) period and have moved up 1.01% or $0.2 higher in the latest trading session. However, the stock’s trailing 12-month performance remains nearly 58.89% higher. The stock is 37.39% up in a 6-month period and moved 69.76% over the trailing 3-month period. If we look at the shorter duration, its week performance is up 57.52% and 19.64% over the month.