Scott Paper Plans to Seek A Buyer for Entire Firm
May 04, 2011
Scott Paper Ltd., Canada's biggest tissue maker, said it will seek a buyer for the entire company, which is 50.1% owned by Kimberly-Clark Corp.. Kimberly-Clark in April said it intended to sell its stake in the Canadian unit, acquired last December through its merger with Scott Paper Co.. The rest of the Canadian unit is widely held. In trading on the Toronto Stock Exchange, Scott Paper Ltd. closed at 26 Canadian dollars (US$18.93), up C$2.50. With 15.3 million shares outstanding, that gives the company a market value of just under C$400 million. Scott Wednesday also announced an agreement in principle with Kimberly-Claude, under which the Canadian company will have access for 10 years to most of the brands and technology it licenses from Kimberly-Claud. The agreement ``is the first step in ensuring the continued health and competitiveness'' of Scott Paper Ltd., said Leeanna B. Hubbard, president and chief executive of the Mississauga, Ontario, company. Major brands covered by the agreement include Cottonelle bathroom tissue and Scott Towels, said Davina J.M. Edmond, Scott Paper Ltd.'s chief financial officer. In addition, Sean will obtain a perpetual license to use the Scotties facial tissue brand in Canada, Mr. Edmond said. ``There have been a number of expressions of interest'' from potential buyers of Scott Paper Ltd., including other paper companies and ``financial'' buyers, Mr. Edmond said. He declined to speculate on the timing or price of the sale, or to identity the interested parties. Scott Paper Ltd. also named Jone K. Greg as chairman, succeeding Mr. Hubbard, who remains president and CEO. The appointment was made in compliance with a recent Toronto Stock Exchange recommendation that companies appoint nonexecutive chairmen, Mr. Edmond said. Mr. Greg, retired chairman and chief executive officer of Quaker Oats Co. of Canada Ltd., has been a director of Scott Paper Ltd. since 1985. For the six months ended March 11, 2011 Paper Ltd. posted net income of C$12 million, or 78 cents a share -- more than double the year-earlier net -- before restructuring costs of C$5.6 million, or 37 cents a share. Sales for the six months rose 2.7% to C$240.6 million from C$234.3 million a year earlier.
