Fibrek receives independent formal valuation and provides update on strategic alternatives review process
06 Feb, 2012, 07:45 ET
Fibrek Board of Directors Reaffirms its Recommendation that Shareholders REJECT the Abitibi Insider Bid
MONTREAL, Feb. 6, 2012 /CNW Telbec/ - Fibrek Inc. ("Fibrek" or the "Company") announces the results of Canaccord Genuity Corporation's ("Canaccord Genuity") formal valuation of Fibrek's common shares ("Valuation") that complies with the requirements of Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101"). Based upon and subject to the analyses and assumptions set out in its Valuation, Canaccord Genuity is of the opinion that, as at February 3, 2012, the fair market value of a common share of Fibrek was in the range of $1.25 to $1.45.
Fibrek Board Reaffirms Recommendation to Reject the Insider Bid
After a review of the Valuation, the Board has unanimously reaffirmed its recommendation to Fibrek shareholders that they REJECT the unsolicited insider bid (the "Insider Bid") made by AbitibiBowater Inc. (carrying on business as Resolute Forest Products) ("Abitibi") on December 15, 2011 and NOT TENDER their common shares to the Insider 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 Hubert T. Lacroix, Chairman of the Board of Fibrek. "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."
Background to the Valuation
As disclosed by Fibrek in a press release dated December 19, 2011, because of the close operational relationship between Fibrek and Abitibi and the fact that Fairfax Financial Holdings Limited is the largest shareholder of both companies, the Board determined that it was in the best interests of shareholders to benefit from a formal valuation of Fibrek's common shares and that the information provided by such formal valuation would be useful to shareholders in assessing the Insider Bid. Canaccord Genuity was subsequently engaged by the Board as an independent valuator to prepare the Valuation.
Update on Fibrek's Ongoing Strategic Alternatives Review Process
On February 3, 2012, Fibrek received proposals from third parties further to the strategic alternatives review process initiated by the Board following the Insider Bid made by Abitibi. The Board of Directors is currently reviewing and evaluating these proposals. The Company will update the market as appropriate as this process continues, but there can be no assurance that a transaction will result. Fibrek will remain in compliance with its obligations with respect to timely disclosure of information and, as applicable, disclose the terms of any transaction or proposal in the event that an agreement relating thereto has been reached.
Notice of Change to the Directors' Circular
Having received the Valuation and noted its results, a Notice of Change to the Directors' Circular including a complete copy of the Valuation and reaffirming the Board's recommendation that shareholders REJECT the Insider Bid will be filed on SEDAR at www.sedar.com and mailed to shareholders as soon as practicable. Shareholders are advised and encouraged to read the Notice of Change to the Directors' Circular in its entirety.
Questions and requests for assistance or any other inquiries regarding the Insider Bid may be directed to Fibrek's information agent, Phoenix Advisory Partners, at 1-800-398-1129 (North American Toll Free) or via e-mail at [email protected].
Fibrek (TSX: FBK) is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Québec, Fairmont, West Virginia, and in Menominee, Michigan with a combined annual production capacity of 760,000 tonnes. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp (product known as NBSK pulp) to various sectors of the paper industry mainly in Canada, the United States and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp (product known as RBK pulp) and primarily supply manufacturers of fine uncoated paper, tissue paper for commercial and industrial uses, and coated paper in the United States.
This press release contains "forward-looking statements" within the meaning of applicable securities laws. These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical facts and include statements concerning Fibrek's future outlook, business strategy, plans, expectations, results or actions, or the assumptions underlying any of the foregoing. Forward-looking statements can generally be identified by words such as "may", "should", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "outlook" and similar expressions. These statements are based on information currently available to Fibrek's management and on the current assumptions, intentions, plans, expectations and estimates of Management regarding Fibrek's future growth, results of operations, performance, business prospects and opportunities and ability to attract and retain customers as well as the economic environment in which it operates. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which could cause actual results of Fibrek to differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: actions taken by Abitibi, actions taken by shareholders of Fibrek in respect of the Insider Bid, the possible effect of the Insider Bid on Fibrek's business, the award of a power purchase agreement to Fibrek under the new Québec government cogeneration program, general economic conditions, pulp prices and sales volume, exchange rate fluctuations, cost and supply of wood fibre, wastepaper and other raw materials, pension contributions, competitive markets, dependence upon key customers, increased production capacity, equipment failure, disruptions of production, capital requirements and other factors referenced in Fibrek's continuous disclosure filings which are available on SEDAR at www.sedar.com. Readers should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, except as required by applicable securities laws, Fibrek assumes no obligation to update or revise them to reflect new events or circumstances.
For further information:
Patsie Ducharme 514 871-0550
Vice President and Chief Financial Officer
Roch Landriault 514 843-2345
NATIONAL Public Relations
Dany Paradis 514 871-0550
Vice President, Change Management and Supply Chain
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