Monday, July 17, 2017 11:15 am

JACKSONVILLE, Florida (From news reports) -- The largest shareholder of Tembec Inc. said it will vote against the company's proposed acquisition by Jacksonville-based Rayonier Advanced Materials Inc. because the purchase price is too low.

Oaktree Capital Management L.P., which owns 19.9 percent of Montreal-based Tembec's stock, sent a letter to the directors of both Rayonier AM and Tembec expressing its concerns.

"Although we appreciate the strategic rationale of a Rayonier-Tembec combination, we believe Rayonier's current offer significantly undervalues Tembec. If the offer is not increased, we believe Tembec shareholders would be better off if Tembec remains independent," the letter said.

Tembec shareholders are scheduled to vote on the deal at a special meeting July 27.

Rayonier AM in May agreed to pay either $4.05 in cash or issue 0.2302 shares of its stock for each share of Tembec. The total value of the deal, including the assumption of debt, is $807 million.

The merger would expand Rayonier AM's market for its cellulose specialty products.

"By acquiring Tembec, Rayonier is capitalizing on a generational opportunity to reduce its dependence on the deteriorating acetate market, transform itself into a well-balanced global specialty cellulose supplier, and reposition its business for long-term sustainability," Oaktree's letter said.

"The price offered to Tembec shareholders does not fully recognize these benefits, nor does it appropriately compensate Tembec shareholders for the increased risk associated with combining with Rayonier," it said.

There have been no other public comments on the deal by Tembec shareholders.

****

Jim Thompson is back again...with a new book on a taboo subject: the personalities in the pulp & paper industry. Jim has written in the past on many subjects based on his four plus decades in the worldwide pulp and paper industry. This new book is packed full of information valuable to the senior member of the industry as well as the recent entrant. A must for every pulp and paper library.