leadf
logo-loader
viewFibrek

Fibrek and Mercer to appeal to Supreme Court of Canada on Quebec court ruling

courthouse_350_4f73455d15b96.jpg

Kraft pulp producer Fibrek (TSE:FBK) and friendly bidder Mercer International (NASDAQ:MERC) said they will seek permission from the Supreme Court of Canada to appeal a ruling by a Quebec Court that blocked a key term of their deal.

The Quebec Court of Appeal reinstated a cease trade order on Fibrek’s private placement of 32.32 million special warrants to Mercer, after an appeal by hostile bidder AbitibiBowater.

“We are disappointed with the decision of the Québec Court of Appeal,” president and chief executive Jimmy Lee of Mercer said in a statement.

"We are continuing with our offer and are seeking to appeal this recent decision to the Supreme Court of Canada."

Fibrek produces and markets high-quality virgin and recycled kraft pulp. It runs three mills found in Quebec, West Virginia and in Michigan and has a combined annual production capacity of 760,000 tonnes.

Abitibi, which does business under the name Resolute Forest Products, has been trying to block the Mercer bid.

On March 20, Abitibi announced about 46.4 percent of Fibrek’s outstanding shares had been deposited to the Abitibi unsolicited insider bid. Fibrek also noted to shareholders that the Abitibi bid is subject to a 50.01 percent minimum tender condition.

Earlier this month, the Quebec Court of Appeal granted Abitibi permission to appeal the Court of Quebec’s decision, which overturned the Bureau de décision et de révision’s decision to block Fibrek’s private placement of warrants to Mercer.

Mercer launched its $170 million, or $1.30 per share bid in February, which is 30 percent higher than Abitibi’s $1.00 hostile takeover offer.

Fibrek’s board unanimously continues to recommend shareholders accept and tender their shares to Mercer’s offer, and to reject Abitibi’s unsolicited insider bid.

Lee added: "We continue to believe that the Bureau's decision to cease trade the private placement diverged from accepted legal principles and unfairly inhibits Fibrek shareholders from obtaining the higher consideration under our offer for all of the outstanding common shares of Fibrek."

Mercer was founded in 1968 and has roughly 1,491 employees. It makes and sells pulp made from wood chips and pulp logs and sells its products mainly in Europe, Asia and North America.

Fibrek’s share price slumped 6.03 percent to $1.09 each in trade in Toronto. Mercer’s stock fell 3.76 percent to $7.42 on the Nasdaq on Wednesday.

Quick facts: Fibrek

Price: - -

TSX:FBK
Market: TSX
Market Cap: -
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Thunderbird Entertainment releases fall slate of shows on streaming services...

Thunderbird Entertainment Group (CVE: TBRD-OTC: THBRF) CEO Jennifer Twiner McCarron joined Steve Darling from Proactive Vancouver with news the company has released their fall slate of shows. The company will have 7 new and returning show including animated, scripted, and factual. Twiner...

9 hours, 48 minutes ago

3 min read