News Release

Released: January 10, 1995  Contact: Ron Messent  660-4800

The British Columbia Securities Commission has denied Slocan Forest Products Ltd.'s application to have the Canfor Corporation's take-over bid stopped, but has ordered Canfor to extend its offer for a further fourteen days, to January 24, 1995.

In announcing its decision Tuesday, the Commission said it has concluded that Canfor's offer does not contravene the take-over bid requirements of the Securities Act. But the Commission also concluded that Slocan shareholders should have more time to assess the offer, and for any other offers to come forward.

On December 19, 1994, Canfor made an offer to acquire all of the outstanding shares of Slocan in exchange for deposit receipts. The offer is conditional on acceptance by holders of at least 75 per cent of Slocan's shares. The offer was set to expire on January 10, 1995.

On December 29, 1994, Slocan applied to the British Columbia and Ontario securities commissions for certain regulatory orders to prevent Canfor's offer from proceeding. The applications were heard January 6 at a joint hearing of the British Columbia and Ontario commissions. The Ontario Commission will be issuing a separate decision. Slocan alleged that the offer does not comply with the Securities Act requirements to "take up and pay for" the Slocan shares deposited and to permit withdrawal of shares deposited but not taken up and paid for 45 days after the offer. Slocan also alleged that Canfor has failed to provide adequate disclosure concerning the offer.

In the alternative, Slocan submitted that, even if the offer does not contravene the Act, it is structured in a manner that is unfair to Slocan's shareholders and prejudicial to the public interest.

The Commission has concluded that:

- Canfor's offer does not contravene the take over bid requirements of the Act. Canfor's issuance of the deposit receipts in exchange for Slocan shares would constitute taking up and paying for the shares. Accordingly, no withdrawal rights would arise 45 days after the date of the offer.

- The disclosure in Canfor's offering material is misleading in some respects. However, two circulars sent to shareholders by Slocan's directors provide extensive commentary on the risks of the offer and address the misleading items in Canfor's material.

- Taken together, the disclosure by Canfor and by Slocan's directors provide Slocan shareholders adequate disclosure to enable them to make an informed decision whether or not to accept the offer.

- The novel structure of Canfor's offer appears to represent a valid and reasonable effort to make an unsolicited offer for Slocan while complying with the Forest Act.

- Canfor's offer is not abusive or unfair to Slocan shareholders. It would be unfair for the Commission to deny Slocan shareholders the opportunity to accept the offer, as Slocan requests.

- Before the Slocan shareholders are required to decide on the offer, more time should be provided for them to assess the offer and for any other offers to come forward.

To provide this additional time, the Commission has extended the minimum deposit period for Slocan shares under Canfor's offer until January 24, 1995.

The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.

Copies of the Commission's decision (6 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.