Abitibi to Buy Fibrek (lovely)
In the event board is kaput -- will post under Dynegy. We have a lot in common with Dynegy Bondholder Legal Interests.
In light of Tembec sale today -- it looks like WFT will pick them up in due course. But would not rule out Abitib just yet -- cause sale was in BC. And Tembec appears to be going to the secondary market for financing on their 190 million cogen-project.
Resolute Forest Products plans take-over bid for Fibrek
November 28th, 2011 | Posted in Mill Sales/Transfers | No comments »
Resolute Forest Products (previously known as AbitibiBowater) intends to make a formal take-over bid to acquire all of the issued and outstanding common shares of Fibrek Inc.
“The acquisition of Fibrek is consistent with our strategy,” stated Richard Garneau, President and Chief Executive Officer. “As we continue to focus on building a sustainable and profitable Company, growth in expanding global pulp markets is the right move, at the right time, for Resolute Forest Products. The range of optimization opportunities that we expect from this acquisition will, over time, deliver increased value to our shareholders.”
The offer would contemplate that holders of Fibrek shares could elect to receive, for each Fibrek share:
Cash and Share Option: C$0.55 in cash and 0.0284 of a Resolute share
Cash Only Option: C$1.00 in cash (subject to proration, as described below)
Shares Only Option: 0.0632 of a Resolute share (subject to proration, as described below)
The maximum amount of cash available will be approximately C$71.5 million and the maximum number of Resolute shares to be issued will be approximately 3.7 million shares. For purposes of calculating the applicable proration, the maximum cash available and the maximum shares available will first be reduced by the amounts necessary to fully satisfy the Cash and Share Option. The Cash Only Option and the Shares Only Option will each be subject to proration in the event aggregate elections exceed the remaining cash or the remaining shares, respectively. If proration applies, the remaining consideration will be delivered in Resolute shares if the Cash Only Option is prorated, or in cash if the Shares Only Option is prorated.
The offer will contain customary conditions for transactions of similar nature, including, among others, a 66?% minimum tender condition, waiver or termination of all rights under any shareholder rights plan(s), receipt of all regulatory, governmental and third-party approvals, consents and waivers, Fibrek not having implemented or approved any issuance of shares or other securities or any other transaction, acquisition, disposition, capital expenditure or distribution to its shareholders outside the ordinary course of business, and the absence of occurrence or existence of any material adverse effect or material adverse change.
Resolute has entered into lock-up agreements with three significant shareholders of Fibrek, including Fairfax Financial Holdings Limited and Pabrai Investment Funds, holding, directly or indirectly, an aggregate of 59,502,822 Fibrek shares (representing approximately 46% of Fibrek’s issued and outstanding Common Shares). Under the Lock-up Agreements, each of the locked-up shareholders has agreed to tender, or cause to be tendered, all of its Fibrek Common Shares to Resolute’s offer, subject to certain conditions. The Lock-up Agreements provide, among other provisions, that Resolute commence a formal take-over bid on or before December 30, 2011, provided certain conditions are satisfied, including there not having occurred any material adverse change with respect to either Resolute or Fibrek. Under the Lock-up Agreements, which are being filed with the U.S. Securities and Exchange Commission (the “SEC”), also available on the Canadian SEDAR filing system, the Locked-up Shareholders have no ability to withdraw any Fibrek Common Shares to tender to or facilitate any competing transaction.
The offer represents a premium of approximately 39% over the closing price of Fibrek’s shares on November 28, 2011, and a premium of approximately 31% over the volume-weighted average trading price of the shares on the TSX for the 20 trading days ending on that date.
Full details of the offer will be included in the formal offer and the take-over bid circular to be filed with the securities regulatory authorities and mailed to Fibrek shareholders.
Based on Fibrek’s public disclosure, it has 130,075,556 issued and outstanding Common Shares (on a non-diluted basis), valuing the offer at approximately C$130 million, or approximately US$126 million. Resolute currently owns no Fibrek Common Shares.
BMO Capital Markets is acting as financial advisor to Resolute, while UBS is acting as financial advisor to a special independent committee of the Board of Resolute.
Source: Resolute Forest Products
About Fibrek
Fibrek 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 paper in the United States
