logo
Share SHARE
FONT-SIZE Plus   Neg

Mercer Sweetens Bid For Fibrek - Update

Canada-based pulp maker Mercer International Inc. (MERC, MRI_U.TO) Wednesday raised its offer to acquire Fibrek Inc. (FBKZF.PK,FBK.TO) thereby firmly outmaneuvering a hostile bid by AbitiBowater Inc.

Following the news, Fibrek shares gained nearly 10 percent in afternoon session on the Toronto Stock Exchange.

Pursuant to an amended support agreement, Mercer said it is now offering C$1.40 per share of Fibrek, compared to its prior offer of C$1.30 per share.

As at February 9, 2012, the date immediately before Mercer revealed its initial offer, the enhanced offer represents a premium of 40 percent over the hostile bid by AbitibiBowater (ABH, ABH.TO).

The raised offer also represents a premium of 94 percent over the closing price of the Fibrek shares on November 28, 2011, the date of announcement of the AbitibiBowater bid.

According to Mercer, the consideration options to be offered for each common share of Fibrek under the sweetened bid will be (i) C$1.40 in cash; (ii) 0.1659 of a share of Mercer common stock; or (iii) C$0.64 in cash plus 0.0903 of a Mercer Share, subject to proration on the basis of a maximum of C$83 million in cash and about 11.7 million Mercer Shares.

Mercer has raised the cash component of its offer by C$13 million compared to its previous offer and it is about C$11.5 superior to the cash component of Abitibi's inferior insider bid.

The offer remains subject to conditions, including there being deposited that number of Fibrek shares which, together with the Fibrek shares and warrants held by Mercer, represent at least 50.1 percent of the outstanding Fibrek shares.

As at the date hereof, about 31 million Fibrek shares have been deposited under the offer, representing about 24 percent of the issued and outstanding Fibrek common shares.

Fibrek meanwhile said its Board has adopted a shareholder rights plan that terminates on May 11, 2012. Fibrek said the rights plan will provide its shareholders with sufficient time to compare Mercer's new offer to AbitibiBowater's inferior bid and will eliminate the threat of AbitibiBowater's coercive offer.

Fibrek based on opinion of its advisers has recommended its shareholders to accept and tender their common shares to the increased Mercer offer.

The Board also recommends that shareholders reject and not tender their common shares to AbitibiBowater's C$1.00 unsolicited insider bid.

MERC is trading at $7.47, down $0.09 or 1.16%, on the Nasdaq.

FBK.TO is trading at C$1.15, up C$0.10 or 9.52%, on the Toronto Stock Exchange.

ABH is trading at $13.37, down $0.04 or 0.30%, on the NYSE. ABH.TO is trading at C$13.42, down C$0.03 or 0.22%, on the TSX.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Tesla's next electric car Model 3 is aimed at the masses with a price tag that could go below $30,000. Tesla CEO Elon Musk, during an earnings call, confirmed that the Model 3 will start selling for "around $35k," and reservations will start from March 31 in Tesla stores and online on April 1 for... Advanced Disposal Services Inc. joins the growing list of companies to postpone their initial public offering amid the volatility in stock markets. Breakfast and snack food giant Kellogg Co. on Thursday reported a loss for the fourth quarter that narrowed from last year as lower revenues were more than offset by a decline in costs and expenses. Adjusted earnings per share for the quarter topped analysts' estimates, while revenue fell short of expectations. Looking ahead, the company affirmed its financial outlook for fiscal 2016.
comments powered by Disqus
Follow RTT