triedtestedand

Quebec: Details are in the lock-up agreements, available at sec.gov website (under ABH filings from Nov. 28th/2011 timeframe). Check out section 4.1.c ... http://www.sec.gov/Archives/edgar/data/1393066/000119312511323478/d261775dex101.htm The lock-ups are for at minimum, 120 days after the Dec. 15th offer ... which would be mid-April. However, there is provision that if legal/regulatory issues are outstanding, they can extend for minimum of either a) 180 days from Dec. 15th offer, or b) 10 days after the legal/regulatory issues are outstanding. i.e. -> I don't think they will run out of time ... unless there is a breach to any of the covenants (4.1.e) , has materially untrue info (4.1.f), etc.

For any interested, here's the linked document: http://www.osc.gov.on.ca/documents/en/Proceedings-OTH/app_20120326_fibrek.pdf Quebec -> I fired off similar to OSC a few minutes ago. It's definitely a comprehensive compilation. I also let the author know that, as of December 31st (before MERC's bid), Steelhead had accumulated a non-insignificant position in MERC as well (check out NASDAQ institutional holdings for MERC), so it's not like Steelhead can argue that the stock portion of MERC's bid is totally worthless.

Quebec: Here's a story I just Google News'd (is that a verb?) that's just been posted related to the OSC hearing: http://business.financialpost.com/2012/03/30/osc-set-to-hear-an-application-on-fibrek/

Hey Gordoffh: This takeover battle, and the accompanying circulars/etc, have definitely mitigated the demise of Canada Post. It's not just the lawyers ... if all the parties just paid me the postage, that would at least be a start. In other news, the OSC is putting off their hearing until next week ... maybe waiting for whether the Supreme Court will hear the case??? http://www.osc.gov.on.ca/en/Proceedings_enr_20120328_fibrek.htm

Advantage ABH ... Game/Set/Match? ... or Supreme Court?? http://www.winnipegfreepress.com/business/resolute-wins-quebec-court-of-appeal-decision-in-battle-to-acquire-fibrek-144455205.html

The Financial Post provides some more background info: http://business.financialpost.com/2012/03/20/fibrek-buyers-up-to-bat/ http://business.financialpost.com/2012/03/20/participants-get-imaginative-when-describing-fibrek-situation/ While the TSX gives it's blessing for the warrants: http://www.reuters.com/article/2012/03/20/fibrek-mercer-idUSL3E8EK2JW20120320

The drama continues (at least until March 22nd): http://www.stockhouse.com/News/CanadianReleasesDetail.aspx?n=8454941 That said ... until now, ABH continues to seek 66 2/3% to proceed ... and why would Steelhead pull back their tendered shares (bringing ABH tendered count back below 50%)? Is that temporary? It's not like ABH have been winning lots of friends with any of the non-locked up minority shareholders.

RE: PPA Word has been that PPA is progressing nicely (of course not as fast as FBK would like) ... I would think we'll hear more about it by the end of the quarter (i.e. within next couple of weeks).

Remember, way back when, when Gretchen was writing about naked short sellers? A simple google search on "gretchen morgenson naked short selling", and what to my amazing eyes should appear ... but references to her, Gary Aguirre, etc. ... at our friendly neighbourhood, Patrick Byrne funded website:: http://www.deepcapture.com/the-story-of-deep-capture-part-3/ Ahh, those were the days ...

st96dgx8: I noticed similar ... i.e. why would Steelhead pull their shares now? I'm sure we could speculate up the wazoo on that. Anyway, the only shares now tendered to ABH are the locked-up ones. Good on FBK/Mercer ... not bad for lousy management only looking out for their own skin, eh?

The regulator taketh away, and the court giveth back: http://www.marketwatch.com/story/mercer-international-inc-announces-successful-appeal-of-the-bureau-de-decision-et-de-revision-order-2012-03-09 Ball's in ABH's court now ...

st96dgx8: I presume it will be in French (but could be wrong), and that it will be only one day.

a) I noticed another article today in the Financial Post ... it looks like some minority shareholders have a channel into that route: http://business.financialpost.com/2012/03/02/regulators-idle-as-fibrek-shareholders-fume/ b) Anyone from Montreal area looking to check out the Quebec court system? I've learned that the FBK appeal is scheduled for: Palais de justice (Court House) de Montréal 1 Notre-Dame Est Montreal Room 14.02 or 14.06 9:30 AM Monday, March 5th Proceedings are open to the public. Although not likely to be Law&Order material, as far as financial matters go, it might have some spice. You probably can't bring in popcorn though. (SD -> You're not a Montreal area person, are you?)

a) A columnist at the Financial Post is keeping this in the news: http://business.financialpost.com/2012/03/01/fight-for-fibrek-drags-on/ b) Along lines of the above, apparently a number of minority shareholders have contacted Quebec's security regulators to have their voices heard about the warrants ruling, the handling of minority shareholder rights in this case, etc. If you want to do similar, you'll obviously want to do it sooner than later, and I've been told that you can direct your message to the AMF. The Autorité des marchés financiers (AMF) is the body mandated by the government of Québec to regulate the province's financial markets and provide assistance to consumers of financial products and services. Their email is [email protected] .

Finetrader: The ABH circular states that it is a condition that they could waive. Even though they have reserved such right, it might get into the "majority of minority shareholder" question, no? So the possibility is there ... That said, doing so might actually enlighten us about the (currently muzzled) lockup shareholders' influence (or lack thereof) and/or motivations, as I would see it going against spirit of original lockup agreements. It would certainly lay to rest any notion of fair and friendly, eh?

Nice little shakedown in the first 30 minutes of trading ... ~3.5M shares traded, with low at $1.19 ... now back to $1.24 and volume stalling ... maybe the game is just how many shares will Steelhead buy as loss leaders, and at what price? And since "Roll Up the Rim to Win" is back, here's my timdbit of the day ... besides owning almost 15% of ABH (their largest single holding by more than 2x any other), Steelhead owns shares in Smith & Wesson (who'da thunk), and ... Mercer! That's right, a new position as of December 31st, 2011 ... to the tune of 850K shares, or 1.5% of the company. http://www.nasdaq.com/quotes/institutional-portfolio/steelhead-partners-llc-83128?sortname=valuesofshare&sorttype=1 Hmmm ... Doesn't that make it a bit harder for them to poo-poo the value of the MERC stock component of their offer? Oh what tangled webs we weave ...

IV: You called it ... http://finance.yahoo.com/news/Resolute-Announces-That-cnw-1940164226.html?x=0 The question now ... what lies ahead? If ABH sticks to requiring 66.67% for tender to proceed, the 48.5% who haven't tendered (i.e. everyone except the lock-ups and Steelhead) will need to be resolute (pardon the pun) in not selling, and let ABH's bid die (and presumably the lock-ups with them) in order for MERC's to have opportunity to succeed. With a kitchen sink quarter like FBK just had, I'd say a few just might throw in the towel now ... with perhaps Steelhead lurking on the open market to pick up more votes? Having a signed PPA would obviously help FBK.

SD: Owning FBK, might your viewpoint not be skewed towards anyone that can help push sales of products (e.g. toilets) that in turdn use NBSK-derived products (e.g. tissue paper). :)

PS for all ... notice any similarities to current situation in the linked video?

The SEDAR filing for the warrants (and the support agreement) is available at: http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00029948 Some of the details (or at least that's how I read them) include: - warrants automatically convert to shares if <50.1% of shares are tendered to MERC - NB: The 50.1% threshold would factor in the MERC warrants being converted (so a lower bar than calculation on undiluted #) - MERC can convert anytime after any of FBK lock-up shareholders tender to ABH - FBK can redeem (at par) within 2 days of conversion, at it's discretion - FBK can redeem in event of a bona fide Superior Bid that kills the support agreement - MERC can require FBK to redeem if >50.1% of shares tendered to MERC - If Superior Bid materializes, warrants convert, and Termination Fee is paid, then MERC is required to vote the converted shares if favour of the Superior Bid - If Superior Bid materializes, warrants convert, and Termination Fee is paid, then MERC required to pay FBK either: a) Termination Fee, if profit from warrants is >= the termination fee b) profit from warrants, if profit from warrants is <= the termination fee - NB: Based on 32.32M warrants, the Termination fee of $8.5M represents a profit of $.263 per warrant You could draw up a pretty sophisticated Venn diagram to map this all out. Looks like they've covered a fair # of bases with this ... what are they missing and/or what is contentious from an FBK-only shareholder perspective? One observation ... the # of warrants being issued represents <25% of existing FBK shareholdings (a magic # for TSX according to one of the law articles referenced ... see http://www.mccarthy.ca/article_detail.aspx?id=4696)

IV: Thanks for the info r.e. Hudbay and Osler ... the links below spell out some interesting contextual details: http://www.mccarthy.ca/article_detail.aspx?id=4759 http://www.osler.com/NewsResources/Default.aspx?id=1303 It looks like everything is a shade of grey ... with interpretation based on whether you're rooting for black or white. We'll see what happens soon.

IV I would more easily subscribe to the rationale IFF FFH were opting for ABH shares, but doesn't the tender circular state that FFH would opt for the cash? That would mitigate thesis that they are giving up on one end to get on the other (recognizing they would still gain as existing ABH shareholders). I'm a long time FFH admirer, so it just seems something is different here. However it plays out, I'm sure there are a few good bar stool stories that will come out of this.

IV Thx for comments. I see the rationale. That said, what were circumstances in the precedents you note? I can see ABH arguing against it ... It's when FBK shareholders who stand to gain (in isolation, without insider/backroom dealings) seek to block it that something smells.

I would also like to know if Steelhead has bought any more shares on the open market the past few days. They are the proxy for other ABH alignees. 13M shares have traded since the MERC offer was announced ... So there are some votes there to be had. That said, buying at $1.30+ to then seek to tender to ABH at lower price would reinforce argument of backroom dealings. Maybe it's just that I can't process FFH going down such rathole ... We have not seen precedent for such before have we? And Sanjeev, your argument about mgmt wanting to keep their paycheques is moot, because the board is making the call ... and more importantly essentially ALL non-lockup/Steelhead shareholders (48%) have said NO to current ABH offer. Et tu, Brutus? (Note that I'm going to fast run out of high-school day Shakespeare quotes, so I'll shut up now.)

Can someone find out who the third shareholder is, besides FFH and Steelhead, who is seeking to block the issuance of the warrant? Presumably it is another FBK shareholder with ABH shareholdings/alignment as well? That said, can someone provide a rational reason why FFH themselves would seek to block the issuance? If, by their lockup agreement, they've implied a $1/share sale price valuation to FBK, then how can issuance of warrants at same value be dilutive from a valuation standpoint? And from a control standpoint, if they considered their FBK position in isolation, then what should they care about owning a few % less of a bigger pie, especially if the proceeds are going straight to strengthening the balance sheet? After all, they benefited 18 months ago with the backstop agreement where they raised their % ownership with the rights offering at $1.01/share. Doesn't FFH's action go above and beyond any "duty" implied as part of their lockup agreement? The only rational reason I can think of is that they would prefer to sell holdings and get ABH shares than get MERC shares (at higher valuation) ... but even there they've stated that they would seek the cash-only option (or as much of such as is pro-rata available). Doesn't this cross a line somehow? Is Prem pissed that he was subpoenaed (although not actually called to testify) at last week's hearings regarding the FBK shareholder rights plan? Something is not right in the state of Denmark ...