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Fibrek receives independent valuation, still reccomends rejecting Resolute bid

A third party has concluded that Resolute Forest Products’ bid for Fibrek Inc. is low. After a formal valuation of Fibrek’s common shares, Canaccord Genuity is of the opinion that, as at February 3, 2012, the fair market value of a common share…

A third party has concluded that Resolute Forest Products’ bid for Fibrek Inc. is low. After a formal valuation of Fibrek’s common shares, Canaccord Genuity is of the opinion that, as at February 3, 2012, the fair market value of a common share of Fibrek was in the range of $1.25 to $1.45.

The offer made by Resolute Forest Products (officially AbitibiBowater Inc.) is for $1.00 per share. It expires on Feb. 13.

After a review of the valuation, Fibrek’s board has unanimously reaffirmed its recommendation to Fibrek shareholders that they reject the unsolicited insider bid made by Resolute on December 15, 2011.

“The valuation by Canaccord Genuity confirms our belief that the Abitibi insider bid significantly undervalues the common shares of Fibrek, and that the lock-up agreements between Abitibi and certain shareholders deprive minority shareholders of the opportunity to obtain full value for their common shares of Fibrek,” stated Hubert T. Lacroix, chairman of the board of Fibrek.

The Montreal Gazette reported on Feb. 6 that this week is likely to be critical in the two-month-old battle for Fibrek. A Quebec administrative tribunal will rule by Friday on the

validity of Fibrek’s shareholder rights plan (poison pill) after several days of hearings.

Fibrek is a producer and marketer of virgin and recycled kraft pulp, with three mills located in Saint-Félicien, Québec, Fairmont, West Virginia, and Menominee, Michigan with a combined annual production capacity of 760,000 tonnes.