Resolute Forest Products Commences Takeover bid of Fibrek

[tyska]

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."

 

And that is the part I don't understand. I am unable to find in the notice were they already can be  paying out and taking up. My understanding is that they can be withdrawn, and if this is just an extension why wouldn't they be able to be withdrawn before the expiration of the new extended deadline. But if they are able to be paying out, how does the proration work out then, do the last shares deposited only have the ABH share option.

[Guest Quebec]

And that is the part I don't understand. I am unable to find in the notice were they already can be  paying out and taking up. My understanding is that they can be withdrawn, and if this is just an extension why wouldn't they be able to be withdrawn before the expiration of the new extended deadline. But if they are able to be paying out, how does the proration work out then, do the last shares deposited only have the ABH share option.

 

Can't help with first question wrt extension/withdrawal but every time they clean up and take the shares tendered, they seems to pay the (expected) combination of shares and cash even when everyone wants cash. It's like the pro-rata/quota is done proportionnaly for each batch, which would leave cash in the same proportion for shares tendered later. Otherwise, I bet all cash would be gone already! Buy @.90 tender @1.00

 

I'm waiting for an incentive, such as those I outlined in an earlier post

[alertmeipp]

the market is going to be bloody tomorrow. I expect they will get 66.7% next week. A trend not worth fighting for for most.

[st96dgx8]

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.

 

Georgeson has misled FBK investors into believing that you can get the $1 cash option so long as the cash is still available.

[alertmeipp]

ABH down to 11.5.

 

At the mean time, FBK posts bad Q.

 

 

http://www.reuters.com/article/2012/05/09/fibrek-idUSL4E8G9A2420120509?feedType=RSS&feedName=marketsNews&rpc=43

 

 

May 9 (Reuters) - Specialty pulp maker Fibrek Inc, which is being acquired by Resolute Forest Products, posted a second straight quarterly loss, as pulp prices continue to decline.

 

For the January-March quarter, the company posted a loss of C$23.2 million ($23.10 million), or 18 Canadian cents per share, compared with a profit of C$3.4 million, or 3 Canadian cents per share a year earlier.

 

Sales fell 8 percent to C$122.1 million.

 

The market price of northern bleached softwood kraft (NBSK) for pulp delivered in North America was lower by $100 per tonne, or 10 percent on average, during the quarter, Fibrek said in a statement.

 

NBSK is the paper industry's benchmark grade of pulp, and is produced mainly in Canada and the Nordic countries.

 

Resolute, formerly known as AbitibiBowater Inc, moved a step closer toward its goal of acquiring full control of Fibrek after Mercer International Inc withdrew its bid.

 

Resolute said earlier this month it had won control of 50.1 percent of shares of Fibrek. [ ID:nL1E8G303P]

 

Shares of Fibrek, which has a market value of $117.9 million, closed at 90 Canadian cents on Wednesday on the Toronto Stock Exchange.

[manualofideas]

"Resolute is pleased to announce that the principal members of Fibrek's outgoing management team, including Pierre Gabriel Côté, chief executive officer, and Patsie Ducharme, chief financial officer, have agreed to assist in the transition process as special advisors until May 31, 2012."

 

Cote gets bought off with a special payment by ABH...  No wonder -- that management team has always only cared about themselves, not the shareholders.  If they had not done that unnecessary rights offering a couple of years ago, there might still be an independent Fibrek today, with a much higher stock price.

[tyska]

Came across a statement by resolute a few days ago saying that they may not do a secondary offer and saying you may be stuck with illiquid shares if you don't tender. I can't seem to find it now, did any one else see that or have a link to it. Thanks

[SharperDingaan]

Having acquired approximately 63.3% of the currently outstanding shares of Fibrek as of May 4, Resolute also announced today that its offer to acquire the remaining shares of Fibrek will NOT be further extended and will expire definitively on May 17. As further described in the offer circular and other ancillary documentation related to the offer (as amended), Resolute intends to carry out a second step transaction to acquire the Fibrek shares not deposited in the offer. By tendering before the final expiry time, remaining Fibrek shareholders will avoid the risks associated with a potentially illiquid market until Resolute can complete the second step transaction for the remaining Fibrek shares, if at all.

 

May 18 we will know what the ABH take-up was; highly likely to be above > 66 2/3%, but may be < 90%. ABH ARE doing a follow-up, but expect the knuckles out once the bid expires - to force the price down. 

 

Keep in mind they want the remaining shares as cheap as possible. A 1c bid increment will steal their lunch  ;)

 

 

[tyska]

Thanks SD, that's the line I was looking for just couldn't seem to find it looking back through releases.  Will be tendering my shares, tired of the thuggery and ineptness of regulators. That bold line is just dripping with contempt for the remaining FBK shareholders.

[alertmeipp]

what a disappointing outcome - now that the management has sided with ABH, most will tender or sold out.

Not worry holding when there are so many cheap craps around.

[manualofideas]

Best guess is that ABH pays up (with equity), then sells the RBK mills (for cash). Materially improves the ABH D/E ratio, takes out the FBK shareholders cleanly, & lets everybody move on.

 

SD, from your mouth into God's ears...  However, the realist in us says the most likely scenario is that the deal announced today is consummated without any changes.

 

So much for the sad FBK saga.  With better management, we could have been easily above $2 by now...

[alertmeipp]

Best guess is that ABH pays up (with equity), then sells the RBK mills (for cash). Materially improves the ABH D/E ratio, takes out the FBK shareholders cleanly, & lets everybody move on.

 

SD, from your mouth into God's ears...  However, the realist in us says the most likely scenario is that the deal announced today is consummated without any changes.

 

So much for the sad FBK saga.  With better management, we could have been easily above $2 by now...

 

the whole deleverage at 1$ right offering and PPA... seems like well-planned.

[lessthaniv]

Currently @ 70.9%. Games over.

[alertmeipp]

even u take the offer or u will be forced to take one.

[tyska]

even u take the offer or u will be forced to take one.

 

You mean you are forced to take this bad offer or get forced a worse offer. :'(

[alertmeipp]

even u take the offer or u will be forced to take one.

 

You mean you are forced to take this bad offer or get forced a worse offer. :'(

Hey, cheers up, abh is cheap. Blah blah.... just down 30% since the offer.

[ubuy2wron]

Just say no thanks. I have lots of experience holding shares in illiquid securities in Canada you can only get squeezed out "forced to sell" when the majority acquires 90 percent. Right of dissent allows for a court adjudicated valuation. The last time I challenged the valuation I received a 50% bump in the buyout price by just saying no. I do not own any FBK but if the price gets cheap enuff I will.

[tyska]

Just say no thanks. I have lots of experience holding shares in illiquid securities in Canada you can only get squeezed out "forced to sell" when the majority acquires 90 percent. Right of dissent allows for a court adjudicated valuation. The last time I challenged the valuation I received a 50% bump in the buyout price by just saying no. I do not own any FBK but if the price gets cheap enuff I will.

 

    Two questions.  What is the process involved in dissenting. Does one need to find a lawyer, file papers etc. Second questions, were is  "cheap enuff" . It is at 86, the last valuation was around 1.20, had an offer of 1.40 without the ppa, so would be looking at 50% plus bump already.

[alertmeipp]

so let's say ABH get 75% this time, does it means those who tendered will have greater chance of getting $1 cash?

 

[tyska]

so let's say ABH get 75% this time, does it means those who tendered will have greater chance of getting $1 cash?

 

If they only get 75% and don't do a secondary offering, it won't be that illiquid of a stock, as there would be about 32 million shares out still. Not that far off what was floating around before the rights offering when Fairfax and crew had a hold of a chunk. The only thing is will they run the company independently or siphon every thing off to ABH. I know my answer.

[st96dgx8]

Just say no thanks. I have lots of experience holding shares in illiquid securities in Canada you can only get squeezed out "forced to sell" when the majority acquires 90 percent. Right of dissent allows for a court adjudicated valuation. The last time I challenged the valuation I received a 50% bump in the buyout price by just saying no. I do not own any FBK but if the price gets cheap enuff I will.

 

If you are interested in dissenting and would like to request a judicial appraisal of fair value please contact [email protected]. In your email please state the number of FBK shares you currently own.

 

Given the $1.40/share bid by Mercer, and the Canaccord independent appraisal report (which if adjusted for the new HyrdoQuebec PPA should increase  fair value to ~$1.6 per share) there's a  good chance that a judge will force Resolute to pay dissenting FBK shareholders a materially higher amount. 

 

[Pick52]

Just received my Fibrek Plan of Arrangement. Does anyone know where I can find a template "Dissent Notice"? I've never done this and I  want to make sure I don't miss any info when I submit mine.

[tyska]

Just received my Fibrek Plan of Arrangement. Does anyone know where I can find a template "Dissent Notice"? I've never done this and I  want to make sure I don't miss any info when I submit mine.

 

Was curious if such a thing existed also.

[valuesource]

I own a chunk of stock and intend to vote against the resolution.  4.227mm shares equals 3.25% of outstanding and 13% of the remaining minority.  Referring to pg 42 of the Plan of Arrangement/Special Meeting material, RFP Acquisition "thinks" it is entitled to vote it's 75% stake as part of the minority.  A read through of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) suggests that this is not a given.  I mean, if RFP Acquisition could vote their majority stake as a minority holder, why go to a special meeting at all?

 

[FFHWatcher]

Did anybody else end up being a dissenting shareholder? Where do we go from here? Has someone organized a group?