West Fraser Timber Co. Announces Renewal of Normal Course Issuer Bid to Enhance Shareholder Value

West Fraser Timber Co. Announces Renewal of Normal Course Issuer Bid

On February 27, 2025, West Fraser Timber Co. Ltd. (TSX and NYSE: WFG) made a significant announcement regarding its plans to renew its normal course issuer bid (NCIB). This renewal has been accepted by the Toronto Stock Exchange (TSX) and signifies West Fraser's commitment to providing value to its shareholders.

Under the terms of the renewed NCIB, West Fraser will have the authority to repurchase up to 3,868,177 common shares, which represents approximately 5% of its total shares issued and outstanding as of February 18, 2025. The NCIB is set to commence on March 3, 2025, and is designed to allow West Fraser to return capital to its shareholders by buying back shares it deems undervalued or a good investment opportunity.

The company believes that share repurchases are a prudent use of its funds, reinforcing its commitment to maximizing shareholder value. The share buyback may take place through various avenues, including the TSX, New York Stock Exchange (NYSE), and alternative trading systems available in Canada and the U.S., adhering to the relevant rules and regulations.

According to the policy parameters of the TSX, the number of shares that can be bought daily is restricted by the average trading volume of the prior six months, allowing a maximum of 34,408 shares per day, while similar conditions apply on the NYSE under Rule 10b-18 of the Exchange Act. In cases of certain exceptions, block purchases may provide opportunities for larger transactions on a given day.

All shares that West Fraser repurchases under the NCIB will be canceled, effectively reducing the number of shares outstanding in the market. The NCIB is scheduled to terminate on March 2, 2026, or sooner if the maximum number of authorized repurchases is reached. West Fraser retains the option to terminate the NCIB earlier if deemed necessary.

To facilitate effective execution of this share repurchase plan, West Fraser intends to establish an automatic purchase program with a brokerage firm. This will permit standard instructions for share purchases to happen during self-implemented blackout periods, while allowing for discretionary purchases outside of these periods.

West Fraser previously had an NCIB that allowed for the repurchase of up to 3,971,380 shares, which is set to expire on February 28, 2025. As of now, the company has successfully acquired 2,061,804 shares at an average price of $81.14 each, consolidating its strategy of returning value to shareholders.

With over 50 facilities across Canada, the United States, the United Kingdom, and Europe, West Fraser is a diversified company that focuses on sustainable forest practices and produces various wood products. It is involved not just in lumber production, but also in manufacturing engineered wood products like OSB, LVL, MDF, plywood, and particleboard, alongside other materials such as pulp and wood chips. The company's products support a wide array of industries, from home construction to industrial applications.

This renews a strategic focus on returning capital and enhancing shareholder value, reflecting West Fraser's ongoing assessment of market conditions and its commitment to prudent financial management. As the market responds to these developments, stakeholders will be keen to observe the impact of the renewed NCIB on share performance and overall company health.