Pulp and Paper Canada

News
ACQUISITION: TEMBEC BIDS $270M FOR CRESTBROOK


February 1, 1999
By Pulp & Paper Canada

MONTREAL, QC — Tembec Inc. has made a $270-million bid for British Columbia’s Crestbrook Forest Industries Ltd., which includes a 325 000-tonne-per-year pulp mill in Skookumchuck, BC, and three nearb…

MONTREAL, QC — Tembec Inc. has made a $270-million bid for British Columbia’s Crestbrook Forest Industries Ltd., which includes a 325 000-tonne-per-year pulp mill in Skookumchuck, BC, and three nearby saw mills. The total value consists of $70.5 million in cash or Tembec A shares and taking on $200 million of Crestbrook debt. The cash and share offer can jump to about $94 million if world softwood prices rise above $550 (US) per tonne this year from $500 (US) per tonne.

Mitsubishi Corp. and Oji Paper Co., the two Japanese shareholders which own 51% of the outstanding common shares of Crestbrook, have entered into lockup agreements with Tembec. They can accept another bid only if it is above $5.

Tembec is offering 0.51298 of a class A share or $4.50 cash for each Crestbrook share, with a cap of $23.5 million on total cash. Any shortfall in cash will be made up in Tembec shares. Tembec has 15.65 million shares outstanding. Crestbrook shareholders stand to gain a one-time payment of up to $1.50 per share, contingent on the amount pulp exceeds $550 (US) on March 31, 1999. The deal has to gain the usual regulatory approvals, including assent from the minister of forests under the British Columbia Forest Act.


Print this page

Related



Leave a Reply

Your email address will not be published. Required fields are marked *

*