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Fibrek says Mercer raises bid; shares up 16%

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Pulp producer Fibrek (TSE:FBK) said Mercer International (NASDAQ:MERC) has raised its offer for the company by 8 percent, further increasing its lead over hostile bidder AbitibiBowater (NYSE:ABH).

Mercer raised its offer to $1.40 per share from $1.30 per share, Fibrek said, representing a 40 percent premium to Abitibi's bid.

"Mercer has once again brought a superior offer to the table - one which recognizes the intrinsic value of Fibrek shares, as confirmed by the independent valuation presented to the board in February, and one the board strongly recommends to shareholders," Fibrek's chairman Hubert T. Lacroix said.

Fibrek's board, which supports the Mercer offer, has adopted a poison pill that would enable shareholders to benefit from the increased Mercer offer.

AbitibiBowater, which operates under the name of Resolute Forest Products, has offered $1 per share.

Fibrek rose by 16 percent Wednesday morning in Toronto to $1.16.

Mercer's previous offer had already been the higher of the two bids but some of Fibrek's largest shareholders have been backing Resolute.

Fibrek announced earlier Wednesday that the Supreme Court of Canada has agreed to fast-track an appeal of a Quebec court decision in Resolute's favour.

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TSX:FBK
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