‘Lack of clarity troubling’ Catalyst says of rejected Third Avenue offer
August 29, 2006 By Pulp & Paper Canada
The board of directors of Catalyst Paper has unanimously recommended that shareholders reject the unsolicited offer…
The board of directors of Catalyst Paper has unanimously recommended that shareholders reject the unsolicited offer made by Third Avenue Management.
The bid, to purchase up to 39 million shares of the company, is viewed as “inadequate from a financial point of view,” Catalyst CEO Russell Horner said in a conference call. The recommendation, contained in a director’s circular, includes opinions from financial advisors, CIBC World Markets and UBS Securities Canada.
“The board is concerned about the price,” Horner confirmed. “It doesn’t reflect the company’s value. Also, Third Avenue’s plans for the company are unclear. The lack of clarity is troubling.”
Third Avenue already owns close to 20% of Catalyst, however, the proposal for increased ownership would grant control and dictatorship over the paper firm’s activities to a level that Catalyst contends is not advisable.
“Catalyst has proven to be profitable in a very tough environment, and we will continue to be so,” Horner said. “We feel the value of these improvements would be lost,” he said of the bid.
The Third Avenue bid has sparked interest in several other potential buyers, and Catalyst is in the process of evaluating those offers.
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