When Mercer International announced a friendly offer for shares of Quebec-based pulp producer Fibrek on Feb. 10, the value offered for shares trumped the previously announced hostile offer by AbitibiBowater (doing business as Resolute Forest Products). But analysts speculated that Resolute would continue its efforts to acquire Fibrek.
They were right. Resolute has extended the expiry date for its offer to Feb. 23, and has applied to the Bureau de décision et de révision (Québec), the administrative tribunal with statutory jurisdiction in securities law and regulatory matters in Quebec, for an order to cease trade the proposed offer by Mercer International Inc.
In its application, Resolute requested that the Bureau exercise its public interest jurisdiction to cease trade the offer on the basis, among other things, that it includes an improperly discounted and dilutive private placement of warrants and an unreasonable break fee. On February 9, the Bureau rendered an order to cease trade Fibrek's tactical poison pill.
According to Resolute, as of the close of business on February 10, approximately 66 million common shares of Fibrek had been deposited to the offer, representing approximately 52% of the outstanding common shares.