Mercer mails to Fibrek shareholders offer and takeover bid for Fibrek at C$1.30/share in cash, says it will appeal Quebec's decision to cease trade private placement of special warrants
February 29, 2012
– Mercer International Inc. (Nasdaq:MERC - News)(TSX:MRI.U) ("Mercer" or the "Company") announced that it has mailed to the shareholders of Fibrek Inc. ("Fibrek") its offer and take-over bid circular (the "Offer Documents") in connection with its previously announced friendly offer (the "Offer") for all of the outstanding common shares of Fibrek (the "Fibrek Shares"). Pursuant to the Offer, Mercer and a wholly-owned subsidiary are offering to acquire all of the outstanding Fibrek Shares for consideration per Fibrek Share, at the election of each holder, in one of the following forms:
C$1.30 in cash per Fibrek Share;
0.1540 of a share of Mercer's common stock (a "Mercer Share") per Fibrek Share; or
C$0.54 in cash plus 0.0903 of a Mercer Share per Fibrek Share,
subject to proration necessary to effect maximum aggregate cash consideration of C$70.0 million and maximum aggregate share consideration of 11,741,496 Mercer Shares as more fully set forth in the Offer Documents. The Offer will be open for acceptance until 5:00 p.m. Eastern Time on April 6, 2012, unless extended or withdrawn by Mercer.
The Offer represents a premium of 30% over the unsolicited insider bid (the "Abitibi Bid") made by AbitibiBowater Inc. ("Abitibi"), 81% over the closing price of the Fibrek Shares on November 28, 2011, the date of announcement of the Abitibi Bid, and 70% over the volume-weighted average trading price of the Fibrek Shares on the Toronto Stock Exchange for the 20 trading days ending on such date.
The board of directors' of Fibrek has prepared and is mailing a directors' circular (the "Directors' Circular"), unanimously recommending that Fibrek shareholders accept the Offer and tender their Fibrek Shares thereunder. The board of directors of Fibrek, after consultation with its legal and financial advisors, has unanimously determined that the consideration offered for the Fibrek Shares pursuant to the Offer is fair to all Fibrek shareholders (other than those who have entered into lock-up agreements with any person other than Mercer with respect to their Fibrek Shares) and that it is in the best interests of Fibrek to support and facilitate the Offer.
The Offer is subject to customary conditions, including, among others, there being deposited (and not withdrawn) that number of Fibrek Shares which, together with the Fibrek Shares and special warrants, if any, held by Mercer, represent at least 50.1% of the outstanding Fibrek Shares on a fully-diluted basis, receipt of requisite regulatory consents, Mercer's Registration Statement on Form S-4 in respect of the Mercer Shares being issued under the Offer, which is also being filed today, being declared effective by the United States Securities and Exchange Commission (the "SEC"), receipt of Mercer shareholder approval of the issuance of Mercer Shares in connection with the Offer and the absence of a material adverse change with respect to Fibrek.
Full details of the Offer are included in the Offer Documents and related documents, which along with the Directors' Circular, will also all be available on SEDAR at www.sedar.com.
On February 23, 2012, the Bureau de decision et de revision (Quebec) (the "Bureau"), the Quebec securities administrative tribunal, dismissed Abitibi's application to cease trade the Offer but issued an order to cease trade the previously announced private placement by Fibrek of 32,320,000 special warrants to Mercer at a price of C$1.00 per special warrant.
Jimmy S.H. Lee, Mercer's President and Chief Executive Officer, stated: "We are pleased to provide the Offer to Fibrek shareholders. We are, however, very disappointed with the Bureau decision to cease trade the private placement of special warrants and are appealing the same to the Court of Quebec. We believe such decision failed to take into account applicable corporate and securities principles and unfairly inhibits Fibrek shareholders from obtaining the higher consideration under our Offer."
Mercer has engaged the Laurel Hill Advisory Group Company to act as information agent under the Offer and has engaged Computershare Investor Services Inc. to act as depositary for the Offer. Any questions or requests for assistance or further information on how to tender Fibrek Shares to the Offer should be directed to, and copies of the above referenced documents may be obtained by contacting, the information agent at 1-877-304-0211 (toll free in North America) or 1-416-304-0211 (collect calls) or by email at firstname.lastname@example.org. Shareholders whose Fibrek Shares are registered in the name of a broker, investment dealer, bank, trust company or other nominee should contact such nominee for assistance in depositing their Fibrek Shares to the Offer.
Mercer International Inc. is a global pulp manufacturing company. Mercer operates three NBSK pulp mills with a consolidated annual production capacity of 1.5 million tons. To obtain further information on the company, please visit its web site at www.mercerint.com.