TSX: FBK
fibrek.com
FIBREK FIGHTS FOR THE RIGHT OF ITS SHAREHOLDERS TO ACCEPT A SUPERIOR OFFER: COMPANY TO VIGOROUSLY OPPOSE ABITIBI'S APPLICATION TO CEASE TRADE THE $1.30 MERCER OFFER
MONTREAL, February 16, 2012 - Fibrek Inc. ("Fibrek"
or the "Corporation") announced today that a
hearing before the Bureau de décision et de révision (Québec)
(the "BDR"), the administrative tribunal with
statutory jurisdiction in securities law and regulatory
matters in the Province of Québec, will be held on February
17 and 20, 2012 to consider the application filed by
AbitibiBowater Inc. (doing business as Resolute Forest
Products) ("Abitibi") for an order to cease trade
the superior offer proposed by Mercer International Inc.
("Mercer") to acquire all of the issued and
outstanding common shares of Fibrek (the "Mercer
Offer") and the private placement of 32,320,000 special
warrants to Mercer for gross proceeds of
$32,320,000.
"Despite the results of an independent formal valuation that
puts the value of Fibrek shares between
$1.25 and $1.45 per share, and in the face of a significantly
superior offer at $1.30 per share from Mercer, both Abitibi
and Fairfax continue their tactics to allow Abitibi to
acquire Fibrek at $1.00 per share," said Hubert T. Lacroix,
Chairman of the Board of Directors of Fibrek.
"We would also like to remind shareholders that Fairfax and
Steelhead are not only shareholders of Fibrek, but also
important shareholders of Abitibi. The Mercer offer is fair
and respects the rights and interests of all our shareholders
and we will vigorously oppose Abitibi's application to block
it," continued Mr. Lacroix.
President and Chief Executive Officer Pierre-Gabriel Côté
added: "Our shareholders have been presented with two offers,
Abitibi's offer at $1.00 and Mercer's offer at $1.30.
Abitibi's application to cease trade the superior Mercer
offer is a blatant attempt to abuse the regulatory process to
prevent our shareholders from receiving superior value. In
addition to providing additional liquidity to Fibrek, the
warrants have been designed to level the playing field
against abusive lock-up arrangements that favour the lower
Abitibi insider bid. They have also been designed to ensure
that they do not stand in the way of an offer which would be
superior to Mercer's. If Abitibi wants the warrants to go
away, all they have to do is make a superior offer to the
Mercer offer."
"Our board has worked diligently to maximize value for
all our shareholders and will continue to take action not to
let Abitibi, Fairfax, Oakmont, Pabrai and Steelhead, whose
interests appear to be very different from our other
shareholders, take advantage of our other shareholders and
deprive them of a fair offer," concluded Mr. Lacroix.
Background to Recent Events
On February 6, 2012, Fibrek announced the results of
Canaccord Genuity Corporation's formal valuation of
Fibrek's common shares ("Valuation") that
complies with the requirements of Multilateral Instrument
61-
101 - Protection of Minority Securityholders in Special
Transactions ("MI 61-101"). Based upon and
subject to the analyses and assumptions set out in its
Valuation, Canaccord Genuity provided its opinion that, as at
February 3, 2012, the fair market value of a common share of
Fibrek was in the range of $1.25 to $1.45.
On February 10, 2012, Fibrek announced that it entered into a
support agreement (the "Support Agreement") with
Mercer pursuant to which Mercer will offer to acquire all of
the outstanding shares of Fibrek by way of a take-over bid at
a price of $1.30 per share.
In addition, Fibrek announced that Mercer agreed to purchase
special warrants (the "Warrants") on a private
placement basis at a price of $1.00 per Warrant for total
subscription proceeds of approximately
$32.3 million. The Warrants are convertible into common
shares of Fibrek on a one-for-one basis under certain
circumstances and are redeemable in certain events. More
particularly, if Fibrek accepts a Superior Proposal (as
defined in the Support Agreement) to the Mercer Offer, it has
the right to terminate the Support Agreement, pay the
termination fee thereunder and redeem the Warrants such that
no common shares are issued.
In response to the Mercer Offer, Abitibi has filed an
application before the BDR to cease trade the Mercer Offer
and the Warrants. Additionally, three shareholders, including
Fairfax Financial Holdings Limited (the "Locked-Up
Shareholders"), who have entered into lock-up agreements
with Abitibi and Steelhead Partners, LLC, who is, like
Fairfax, a significant shareholder of Abitibi, have also,
through counsel, sought to stop the issuance of the Warrants
before the Toronto Stock Exchange (the "TSX").
Fibrek is preparing its submissions to the BDR and the TSX
and intends to vigorously oppose Abitibi's and the
Locked-Up Shareholders' applications.
Use of Special Warrants Proceeds
The proceeds from the private placement of Warrants are initially to be used by Fibrek to reduce its net debt. In addition, liquidity will be required to pay for the recent incremental costs associated with its strategic alternatives review process and for capital expenditures, which include Fibrek's power generation initiatives. Such capital expenditures are currently estimated by management to be at $30 million for fiscal 2012 including maintenance capital expenditures. Management also believes that lower than anticipated sales for the fourth quarter of fiscal 2011 resulted in an increased need for liquidity in the short term.
Important Shareholder Information
The Board of Directors continues to unanimously recommend that shareholders ACCEPTand TENDERtheir common shares to Mercer's $1.30 offer and to REJECTand NOT TENDERtheir common shares to Abitibi's unsolicited $1.00 insider bid. If shareholders have tendered their shares to the Abitibi insider bid, the Board recommends that they WITHDRAWthem immediately.
The Support Agreement and the Special Warrant Agreement have
been filed and are available at www.sedar.comunder
the company's profile. Full details of the Mercer Offer will
be included in the take- over bid circular which is expected
to be mailed to holders of common shares of Fibrek by
February 29,
2012.
For more information on how to tender Fibrek Common Shares or
for any other inquiries regarding the Mercer Offer, please
contact Fibrek's information agent, Phoenix Advisory
Partners, at 1-800-398-1129 (North American Toll Free) or via
email at inquiries@phoenixadvisorypartners.com.
About Fibrek
Fibrek (TSX: FBK) is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Québec, Fairmont, West Virginia, and in Menominee, Michigan with a combined annual production capacity of 760,000 tonnes. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp
(product known as NBSK pulp) to various sectors of the paper industry mainly in Canada, the United States and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp (product known as RBK pulp) and primarily supply manufacturers of fine uncoated paper, tissue paper for commercial and industrial uses, and coated p aper in the United States.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of applicable securities laws. These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical facts and include statements concerning Fibrek's future outlook, business strategy, plans, expectations, results or actions, or the assumptions underlying any of the foregoing. Forward-looking statements can generally be identified by words such as "may", "should", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "outlook" and similar expressions. These statements are based on information currently available to Fibrek's management and on the current assumptions, intentions, plans, expectations and estimates of Management regarding Fibrek's future growth, results of operations, performance, business prospects and opportunities and ability to attract and retain customers as well as the economic environment in which it operates. Forward- looking statements are subject to known and unknown risks, uncertainties and other factors which could cause actual results of Fibrek to differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: actions taken by Abitibi or Mercer, actions taken by shareholders of Fibrek in respect of Abitibi's unsolicited offer and the Mercer Offer, the possible effect of Abitibi's unsolicited offer and the Mercer Offer on Fibrek's business, the award of a power purchase agreement to Fibrek under the new Québec Government cogeneration program, general economic conditions, pulp prices and sales volume, exchange rate fluctuations, cost and supply of wood fibre, wastepaper and other raw materials, pension contributions, competitive markets, dependence upon key customers, increased production capacity, equipment failure, disruptions of production, capital requirements and other factors referenced in Fibrek's continuous disclosure filings which are available on SEDAR at www.sedar.com. Readers should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, except as required by applicable securities laws, Fibrek assumes no obligation to update or revise them to reflect new events or circumstances.
Information:
Investor Relations: Patsie Ducharme 514 871-0550
Vice President and Chief Financial Officer
Media Relations: Roch Landriault 514 843-2345
NATIONAL Public Relations
Dany Paradis 514 871-0550
Vice President, Change Management and Supply Chain
distribué par | Ce noodl a été diffusé par Fibrek Inc. et initialement mise en ligne sur le site http://www.fibrek.ca. La version originale est disponible ici. Ce noodl a été distribué par noodls dans son format d'origine et sans modification sur 2012-02-17 18:23:13 PM et restera accessible depuis ce lien permanent. Cette annonce est protégée par les règles du droit d'auteur et toute autre loi applicable, et son propriétaire est seul responsable de sa véracité et de son originalité. |
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