Resolute Forest Products Commences Takeover bid of Fibrek

[cwericb]

I got a message from RBC to call them re FBK. What did you tell them, I'm not sure I'm going to call back.

[tyska]

I see Resolute is at 50.1%.

 

http://www.4-traders.com/ABITIBIBOWATER-INC-6989293/news/AbitibiBowater-Inc-Resolute-Now-Owns-50-1-of-Fibrek-14309244/

[triedtestedand]

Power contract signed.

 

http://finance.yahoo.com/news/fibrek-signs-historic-contract-hydro-200700924.html

 

Now we wait to see what % tendered, what steelhead did, and what ABH does for a second-step if needed. 

[alertmeipp]

This is sickening...

 

Prem and friends get a steal on this company for 90 cents.

 

ABH now own %53.8.. hopefully they pay up.

[gordoffh]

This smells so bad it is laughable. Signed on the day offer expires.

[alertmeipp]

After all, Resolute's headquarter is in Quebec?!

[tyska]

Power contract signed.

 

http://finance.yahoo.com/news/fibrek-signs-historic-contract-hydro-200700924.html

 

Now we wait to see what % tendered, what steelhead did, and what ABH does for a second-step if needed.

 

Maybe they will come out with a 60 cent offer and say look how we treated you before we had control of the company, so you better get out. Man that smells, that the ppa would come out today.

[triedtestedand]

Still not at 66 2/3% ... offer extended until May 17th:

 

http://www.newswire.ca/en/story/968639/resolute-owns-63-3-of-fibrek-extends-offer-to-may-17

 

Battle of wills now.

 

[alertmeipp]

We are done.

If u want to enjoy these assets and PPA, buy some ABH. I think I will move the $ to something else.

 

 

[SharperDingaan]

ABH may have won but there are still $ on the table

[tyska]

Can shares be pulled back, now that they have extended it again?

[alertmeipp]

ABH may have won but there are still $ on the table

 

They own 63.3 now.. just 3% more and they can force it. I believe there is no $ left if you are solely looking at FBK.

[SharperDingaan]

The PPA is a 25yr 16M EBITA boost from Hydro Quebec. It flows directly to the bottom line.

 

Per the BoC, 30yr Canada’s trade at a 4% yield. Hydro Quebec is not Canada, so assume a 25% risk premium & 5% yield. PV of the 25yr EBITA boost (end of period annuity) at 5% is roughly 225.5M, or 1.73/Fibrek share on 130M shares.

 

ABH paid $1/Fibrek share (cash), a price/book ratio of .50x. Apply a P/B of .50x to the PPA & you would expect an increase of $.87. As FBK shareholders tendering for cash have received it, you would expect a market price of around $1.87

 

Given the Merc withdrawal, scheduled shutdown’s etc, it is highly likely that FBK will report a very bad quarter. It is also very likely that over the near term, supply will greatly exceed demand, before it stabilizes.

 

Now an ‘ornery fellow might take the view that ABH will not be able to squeeze out the final 10% ... unless they fully pay up for that PPA ...    ;)

 

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=FBK:CN

[SharperDingaan]

... then discover that Sharper is one of their new shareholders  :D

[alertmeipp]

Anyone know what's the default option if you don't tender but end up forcing to take the deal because it pass 67%.

[tyska]

Anyone know what's the default option if you don't tender but end up forcing to take the deal because it pass 67%.

 

Just going through yesterdays mail and have the updated resolute offer that expires on May 4th. Not a securities lawyer so some of it confuses me. To answer the question that I had, it appears that shares can be withdrawn before the Expiry time. But when they extend the expiry time, are the shares that were tendered before the last expiry time not able to be withdrawn. As they talk about how they have taken up and paid for shares under the other offers. I would have thought with it just being extended they would still be able to be withdrawn except for the lock-up.

I notice on this offer it is for 662/3 % of shares, I guess they are able to just change the terms and conditions to what ever they want, with out having to re-tender.

And to sort of answer your question alert. No sort of default appears to kick in unless they acquire 90% of the shares. They will then acquire the shares under the same terms as shares acquired under the offer. Clear as mud. ;)

[Guest Quebec]

Sharper, my english is not great, do you mean to say you will hold out until you are in the remaining 10% shareholders that have not tendered ? I.e. Wait it out as long as it takes to get paid more.

 

Or, you've tendered already and are an abh shareholder that will benefit from this "steal" acquisition?

[SharperDingaan]

We tendered most of our FBK for cash & bought ABH directly @ < 12.50; with our remaining position we're willing to gamble.

About as conflicted as the rest of the major ABH shareholders  ;)

[alertmeipp]

SD,

 

So will/do you get all cash for your tender? Or some cash and some ABH?

 

Do you get ur money right away? or that would be after the current extended tender is completed?

[alertmeipp]

Anyone know what's the default option if you don't tender but end up forcing to take the deal because it pass 67%.

 

Just going through yesterdays mail and have the updated resolute offer that expires on May 4th. Not a securities lawyer so some of it confuses me. To answer the question that I had, it appears that shares can be withdrawn before the Expiry time. But when they extend the expiry time, are the shares that were tendered before the last expiry time not able to be withdrawn. As they talk about how they have taken up and paid for shares under the other offers. I would have thought with it just being extended they would still be able to be withdrawn except for the lock-up.

I notice on this offer it is for 662/3 % of shares, I guess they are able to just change the terms and conditions to what ever they want, with out having to re-tender.

And to sort of answer your question alert. No sort of default appears to kick in unless they acquire 90% of the shares. They will then acquire the shares under the same terms as shares acquired under the offer. Clear as mud. ;)

 

At this point, I expect most have given in. So Sad.

[tyska]

Anyone know what's the default option if you don't tender but end up forcing to take the deal because it pass 67%.

 

Just going through yesterdays mail and have the updated resolute offer that expires on May 4th. Not a securities lawyer so some of it confuses me. To answer the question that I had, it appears that shares can be withdrawn before the Expiry time. But when they extend the expiry time, are the shares that were tendered before the last expiry time not able to be withdrawn. As they talk about how they have taken up and paid for shares under the other offers. I would have thought with it just being extended they would still be able to be withdrawn except for the lock-up.

I notice on this offer it is for 662/3 % of shares, I guess they are able to just change the terms and conditions to what ever they want, with out having to re-tender.

And to sort of answer your question alert. No sort of default appears to kick in unless they acquire 90% of the shares. They will then acquire the shares under the same terms as shares acquired under the offer. Clear as mud. ;)

 

At this point, I expect most have given in. So Sad.

 

I was curious if some could, or would, pull back their shares after the ppa announcement. But if SD has thrown in the towel, you are probably sadly right. :(

[Guest Quebec]

If one can get all cash... but everyone wants cash with abh paper down 20%, so you end up with the mix. In one recent communication abh mentionned that 100% of the tendered shares in this particular take up was for cash and so they issues so they paid so many shares and so many dollars.

 

I can't vouch for SD but I remain curious on that.

 

 

[alertmeipp]

Anyone know what's the default option if you don't tender but end up forcing to take the deal because it pass 67%.

 

Just going through yesterdays mail and have the updated resolute offer that expires on May 4th. Not a securities lawyer so some of it confuses me. To answer the question that I had, it appears that shares can be withdrawn before the Expiry time. But when they extend the expiry time, are the shares that were tendered before the last expiry time not able to be withdrawn. As they talk about how they have taken up and paid for shares under the other offers. I would have thought with it just being extended they would still be able to be withdrawn except for the lock-up.

I notice on this offer it is for 662/3 % of shares, I guess they are able to just change the terms and conditions to what ever they want, with out having to re-tender.

And to sort of answer your question alert. No sort of default appears to kick in unless they acquire 90% of the shares. They will then acquire the shares under the same terms as shares acquired under the offer. Clear as mud. ;)

 

At this point, I expect most have given in. So Sad.

 

I was curious if some could, or would, pull back their shares after the ppa announcement. But if SD has thrown in the towel, you are probably sadly right. :(

 

You win some lose some. But I can't believe my investment in FBK ends in such a fashion.

[SharperDingaan]

At each successive ABH take-up, if you asked for the $1 cash under Option 2 that is what you received. It will continue untill the maximum (per the offer details) cumulative 71.5M of cash has been paid out. It takes roughly 10-15 days to get your cash/ABH shares once your FBK shares are accepted.

 

We hedged our bet, we haven't walked away. 85% of our FBK holding for cash reinvested directly in ABH @ <12.5, once ABH attained 50%+1; we're gambling the remaining 15%. Dependent upon what prevails, we may well double up on FBK before its over.

 

The more ABH squeezes the more we gain, & we gain more if ABH stalls at < 90%. Obviously not for everyone, but a page from the ABH playbook.

 

Best of luck to you.

 

[Guest Quebec]

It does not jibe with what abh states in their latest offer under Recent Developments:

 

"Take-up and Payment of Fibrek Shares

 

On April 23, 2012, we took up an additional 2,664,351 Fibrek Shares that had been validly deposited between April 12, 2012 and the close of business on April 23, 2012 (including shares deposited with a Notice of Guaranteed Delivery). All of the Fibrek Shares taken up on April 23, 2012 were deposited into the Cash Only Option. After proration, approximately Cdn$1.5 million is being paid and 76,000 shares of Resolute Common Stock are being issued as Offer Consideration for the Fibrek Shares taken up by us on April 23, 2012."