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Resolute Reaffirms Offer for Fibrek

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AbitibiBowater Inc., Montreal, Que., Canada, doing business as Resolute Forest Products, this week announced that it would issue a notice of variation to the offer circular and other ancillary documentation in connection with its outstanding offer to acquire Fibrek Inc., Montreal, Que. The notice of variation will describe certain changes to the offer documents, including the registration statement filed with the U.S. Securities and Exchange Commission (SEC), the sole purpose of which are to address comments from the SEC in its customary review process. From the perspective of Fibrek's shareholders, Resolute notes, the terms of the offer are substantially consistent with the original offer.

Following Resolute's offer to acquire Fibrek this past November 28, Fibrex's board of directors filed a "Directors' Circular" on December 30 recommending that the company's shareholders reject the "unsolicited insider bid." The board also recommended that any shareholders who have tendered their common shares withdraw them. The Fibrex board noted that Resolute's bid "is timed to take advantage of turbulence in the capital markets and cyclical trough in pulp prices and deprives minority shareholders of significant intrinsic value in the NBSK pulp business, electricity production, and profitable long-term agreement in the RBK segment. "

We are committed to move forward and are addressing one of the regulatory steps in our offer to purchase Fibrek," said Richard Garneau, president and CEO. "We also acknowledge Fibrek's directors' circular filed on SEDAR on December 30. It does not change our firm belief that the offer we announced on November 28 presents Fibrek's shareholders with a compelling opportunity. The fact that three of their largest individual shareholders, representing approximately 46% of the outstanding shares, have agreed to tender their shares to our offer supports that belief."

Resolute says that Fibrek shareholders should consider the following factors in making their decision to accept the offer:

  • The offer represents a substantial premium to Fibrek's pre-announcement trading price
  • The offer is not subject to any financing condition
  • Fibrek shareholders have the opportunity to exchange their shares of Fibrek, which had been thinly traded through to the date the offer was announced
  • Resolute is uniquely positioned to integrate Fibrek into its existing operations
  • Fibrek shareholders who become Resolute shareholders will own shares in a company that:
    • is financially stronger
    • has a diversified asset and product base
    • is committed to continue improving its flexible, low-cost manufacturing position
    • maintains a prudent capital structure, with a ratio of long-term debt to last 12 months adjusted EBITDA of 1.3x as of the end of the third quarter of 2011.

The offer, which Resolute is making together with RFP Acquisition Inc., a wholly-owned subsidiary, is more fully described in the offer circular and other ancillary documentation the company filed on December 15, 2011, on the Canadian Securities Administrators' website (SEDAR), as amended on January 9. The offer will expire at 5:00 p.m. (Eastern Standard Time) on January 20, unless it is extended or withdrawn by Resolute.


Xerium Technologies, Inc.