Western Forest - the Brookfield factor

Recently Western forest announced a secondary offering to buy 92 million shares that Brookfield Special Situations owned.Shares were sold at $2.50 a share.This offering went so well that they sold another 22 million shares.This removes all of the equity that Brookfield had in Western Forest.Brookfield had a 49% interest in Western and now it has no equity at all.This increases the float of shares and gives their shares more liquidity.It also gives Western more control over it's own operations.This is seen as a very positive factor in Western (WEF) moving higher in the coming quarters.
        Results in 2014
  Western already reported good results for the first half of 2014.Revenue is up 25 to 30% from Q2,2013.Operating expenses increased only 10% over Q2 in 2013.Consequently net income has almost doubled since the same quarter in 2013.This helped to bring the price of WEF shares up to the $2.50 per share area.The price of the shares allowed Western to make this offer look acceptable to Brookfield.Without good operating metrics WEF could not have sold enough shares at $2.50.But in fact,their offering was so successful that they sold another 22 million shares.This also eliminates any management fees that WEF had to pay to Brookfield.Western decided to pay a dividend and this makes their stock look more attractive to investors also.
       Management changes
    Western has already started to make changes to their operation.They closed down their Nanaimo saw mill and invested $10 million in their Duke Point and Saltair operations.Employees will be shifted over to the expanded operation in Duke Point.This will reduce their operational costs and increase overall production.Additionally this will allow more flexibility to produce different grades of lumber.If one of their markets changes so that their is more demand for one product and less for another Western will have little trouble adapting to the market.Western will likely in the future have to increase their log production especially to the Chinese market. Lastly it is not clear whether they have continued and ramped up their chip mill or closed it down.It is likely that they will need this in the future as well as increased log production.But now they have much more flexibility to make these changes.Look for  slightly better  earnings in the third quarter and down a little in the fourth quarter.Nevertheless earnings per share and net income will likely be double that of 2013.