Did you see RPP.to news !! Buyout at 100% trading price.
Repap Enterprises Inc
RPP
Shares issued 743,960,637
Aug 28 2000 close $.130
Aug 29 2000 2:03:04
Mr. Juha Niemela reports
UPM-Kymmene Corporation and Repap have signed an acquisition agreement
under which UPM-Kymmene will acquire Repap in a transaction to be effected
by way of an amalgamation. Pursuant to the agreement, Repap's shareholders will
receive 20 cents Canadian per common share, which represents a premium of
approximately 100 per cent over the recent trading price of Repap common
shares on the Toronto Stock Exchange. The transaction values Repap's equity at
approximately $160-million (Canadian), implying a total enterprise value for
Repap of approximately $1.35 billion (Canadian). The transaction will result in a
good will value of approximately $400-million. With respect to Iceberg's
outstanding debt securities, UPM-Kymmene is considering its options, which may
include purchases of such securities in negotiated transactions, a redemption of all
or a portion of such securities after consummation of the transaction and/or leaving
such securities outstanding.
The transaction has been unanimously approved by the boards of directors of
both UPM-Kymmene and Repap. In addition, Repap's two largest shareholders,
the Third Avenue Trust and TD Asset Management Inc., have agreed to support
the transaction and vote their combined total of approximately 31 per cent of
Repap's common shares in favour of approving the transaction, subject to certain
conditions as outlined in their respective support agreements.
The transaction requires the approval of 66 2/3 per cent of the votes cast by
Repap shareholders. A shareholder meeting to approve the amalgamation is
expected to be held in mid-October. The transaction is conditional upon receipt of
all necessary regulatory approvals. The transaction does not require the approval
of UPM-Kymmene shareholders.
The acquisition supports UPM-Kymmene's long-term strategy. The transaction
strengthens UPM-Kymmene's global leadership in magazine papers and it is a
logical step for UPM-Kymmene to become a major local magazine paper
producer in North America. UPM-Kymmene continues to further develop a
low-cost production structure with state-of-the-art facilities. In addition,
substantial synergies can be achieved. UPM-Kymmene estimates that
approximately $50-million in annual pretax synergies can be achieved by 2002,
through product and market mix optimization, cost savings in purchasing, logistics
and selling, general and administrative expenses as well as via improvement
through best practices.
Juha Niemela, the president and chief executive officer of UPM-Kymmene said,
"Repap's management and personnel have done an outstanding job over the past
years to improve the financial and operational performance of the company. The
fully integrated mill will enable UPM-Kymmene to better serve its North American
customers."
Stephen Larson, the president and chief executive officer of Repap, stated that,
"Repap's world class operations and people will complement UPM-Kymmene's
core competence of efficiency very well."
Repap has agreed not to solicit competing offers or proposals to the transaction,
although it may respond to an unsolicited superior proposal. As a condition of
UPM-Kymmene entering into the transaction, Repap has granted
UPM-Kymmene an irrevocable option to purchase newly issued common shares
of Repap representing approximately 19.9 per cent of the issued and outstanding
common shares of Repap. This option may be exercised by UPM-Kymmene if a
competing acquisition proposal is publicly announced. In certain circumstances,
Repap will be required to pay a termination fee to UPM-Kymmene. The option
and the termination fee have an aggregate economic value of $18-million,
representing approximately 1.3 per cent of Repap's enterprise value.
RBC Dominion Securities acted as financial adviser to UPM-Kymmene and
Donaldson, Lufkin & Jenrette acted as financial adviser to Repap.
About UPM-Kymmene
UPM-Kymmene, which is based in Helsinki, Finland, is one of the world's largest
forest product companies and paper producers. The group's turnover in 1999,
amounted to $11.1 billion and operating profit to $2.1-billion. The company's
product range covers printing papers, converting materials and wood products.
Printing papers comprises magazine papers, newsprint and fine papers; the
printing papers account for over half of the group's turnover. UPM-Kymmene is
the world's second largest producer of magazine papers and is among the top 10
producers of newsprint and fine papers. UPM Converting is among Europe's
leading suppliers of converting materials. The group is also Europe's biggest
plywood producer and one of the continent's biggest producers of sawn timber.
UPM-Kymmene's operations are focused on European Union countries and the
United States, where the company owns Blandin Paper in Minnesota, producing
LWC magazine papers. North American sales account for 11 per cent of the
group's turnover. The Group has production plants in 15 countries and 170 sales
and distribution companies spanning five continents.
WARNING: The company relies on litigation protection for "forward-looking"
statements. |
