Fibrek receives new offers from third parties, reaffirms rejection of insider bid


Fibrek (TSE:FBK) said Monday it has received takeover offers from third parties, part of its strategic alternatives process initiated after a hostile bid in November.

The company said its board is in the process of reviewing the proposals, and will update shareholders accordingly.

Fibrek also reaffirmed its December 2011 rejection of an unsolicited offer from insider AbitibiBowater (NYSE:ABH)(TSE:ABH) - which does business under the Resolute Forest Products name - following the results of an independent formal valuation of its shares.

According to the formal valuation, which was completed by Canaccord Genuity, the fair market value of Fibrek is in the range of $1.25 to $1.45 per share.

First announced in November 2011, Abitibi offered either $0.55 cash plus 0.0284 of a Resolute share, $1 cash only or 0.0632 of a Resolute share only.

As of 2:11 pm EDT on Monday, February 6, Fibrek shares were trading at $1.08 - up 4.85 percent for the day.

Fibrek said Resolute's bid was too low and an "insider" offer, since Resolute has extensive operational knowledge of Fibrek's Saint-Félicien mill in Quebec, which it built and formerly owned. Additionally, Resolute is Fibrek's largest wood chip supplier.

The company reaffirmed Monday its recommendation for its shareholders to reject the bid.

"The valuation by Canaccord Genuity confirms our belief that the Abitibi insider bid significantly undervalues the common shares of Fibrek, and that the lock-up agreements between Abitibi and certain shareholders deprive minority shareholders of the opportunity to obtain full value for their common shares of Fibrek," stated Fibrek chairman, Hubert T. Lacroix.

"The valuation demonstrates conclusively that Abitibi's insider bid conveniently ignores probable and material new streams of operating income.

"Our goal continues to be to ensure that our shareholders are fully compensated for the full value of their investment in our company."

The Quebec-based company produces virgin and recycled kraft pulp at three mills in Quebec, West Virginia and Michigan. The pulp from the Quebec mill is used in printing and writing papers, specialty and packaging as well as tissue in markets in North America and Europe.

Fibrek has a combined annual production capacity of 760,000 tonnes and approximately 500 employees.

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