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.