Louisiana-Pacific Corporation (NYSE:LPX): Hits 52-Week Low Following Termination Of Strategic Deal


Dallas, Texas 05/21/2014 (FINANCIALSTRENDS) – Louisiana-Pacific Corporation (NYSE:LPX) recently announced termination of a strategic deal with Ainsworth Lumber Co. Ltd. This announcement came of May 14, 2014, a week after the company reported weak 1Q14 financial results on May 8, 2014. Since May 14th, the stock has delivered 7.32% negative returns and on Tuesday, May 20th, it closed at $14.18, losing 1.66% from its previous close. However, during the session the stock hit new yearly low of $13.77. Its 52 week high is of $20.35. The stock traded with significantly higher volumes of 6.57 million shares as compared to its 30 day average trading volume of 4.17 million shares.

Termination of Acquisition Deal:

Louisiana-Pacific Corporation (NYSE:LPX) was required to terminate the acquisition deal with Ainsworth, given its failure to obtain necessary regulatory approvals which sought additional divestitures than those agreed in the previous acquisition deal. Earlier the company agreed on the deal on September 4, 2013 to acquired Vancouver based Ainsworth, for about $1.1 billion. If things would have gone straight and regulatory approvals would have been obtained, the deal was expected to be complete by the end of calendar 2013 itself. However, regulatory approvals could not be obtained under the Canadian Competition Act as well as the Antitrust Improvement Act, 1976.

Unless, the deal was believed to be an excellent strategic fit for Louisiana-Pacific, helping it to increase its OSB segment production capacity as well as crucial access to high growth Asian markets.

Analyst Coverage:

Investment analysts at RBC Capital began coverage on the stock of Louisiana-Pacific Corporation (NYSE:LPX) with an “outperform” rating and a price target of $18 per share in a research note released on Monday.

The stock of Louisiana-Pacific has been assigned a “hold” rating by three research analysts; and a “buy” rating by five research analysts. The stock currently has a consensus rating of “buy” with an average price objective of $19.29 which suggests significant upside potential from its previous close.

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